North Carolina
|
56-1421916
|
|
(State
of Incorporation)
|
(I.R.S.
Employer Identification Number)
|
|
341 North Main Street, Troy, North
Carolina
|
27371-0508
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
|
Registrant’s
telephone number, including area code:
|
(910) 576-6171
|
Title of each class
|
Name of each exchange on which
registered
|
|
Common
Stock, No Par Value
|
The
Nasdaq Global Select Market
|
¨
Large
Accelerated File
|
x
Accelerated
Filer
|
¨
Non-Accelerated
Filer
|
¨
Smaller
Reporting Company
|
(Do
not check if a smaller reporting company)
|
Begins
on
|
|||
Page (s)
|
|||
Forward-Looking Statements | 5 | ||
|
|||
Item
1
|
5
|
||
Item
1A
|
18
|
||
Item
1B
|
23
|
||
Item
2
|
23
|
||
Item
3
|
23
|
||
|
|||
Item
5
|
24,
60
|
||
Item
6
|
27,
60
|
||
Item
7
|
27
|
||
Overview
– 2009 Compared to 2008
|
28
|
||
Overview
– 2008 Compared to 2007
|
30
|
||
Outlook
for 2010
|
31
|
||
Critical
Accounting Policies
|
32
|
||
Merger
and Acquisition Activity
|
34
|
||
Statistical
Information
|
|||
Net
Interest Income
|
36,
61
|
||
Provision
for Loan Losses
|
38,
68
|
||
Noninterest
Income
|
39,
62
|
||
Noninterest
Expenses
|
40,
63
|
||
Income
Taxes
|
41,
63
|
||
Stock-Based
Compensation
|
41
|
||
Distribution
of Assets and Liabilities
|
45,
63
|
||
Securities
|
45,
64
|
||
Loans
|
47,
66
|
||
Nonperforming
Assets
|
48,
68
|
||
Allowance
for Loan Losses and Loan Loss Experience
|
50,
69
|
||
Deposits
and Securities Sold Under Agreements to Repurchase
|
51,
71
|
||
Borrowings
|
53
|
||
Liquidity,
Commitments, and Contingencies
|
54,
73
|
||
Capital
Resources and Shareholders’ Equity
|
55,
75
|
||
Off-Balance
Sheet Arrangements and Derivative Financial Instruments
|
57
|
||
Return
on Assets and Equity
|
57,
74
|
||
Interest
Rate Risk (Including Quantitative and Qualitative Disclosures About Market
Risk)
|
57,
72
|
||
Inflation
|
59
|
||
Current
Accounting Matters
|
59
|
||
Item
7A
|
59
|
||
Item
8
|
|||
Consolidated
Balance Sheets as of December 31, 2009 and 2008
|
77
|
||
Consolidated
Statements of Income for each of the years in the three-year period ended
December 31, 2009
|
78
|
Begins
on
|
|||
Page (s)
|
|||
Consolidated
Statements of Comprehensive Income for each of the years in the three-year
period ended December 31, 2009
|
79
|
||
Consolidated
Statements of Shareholders’ Equity for each of the years in the three-year
period ended December 31, 2009
|
80
|
||
Consolidated
Statements of Cash Flows for each of the years in the three-year period
ended December 31, 2009
|
81
|
||
Notes
to Consolidated Financial Statements
|
82
|
||
Reports
of Independent Registered Public Accounting Firm
|
131
|
||
Selected
Consolidated Financial Data
|
60
|
||
Quarterly
Financial Summary
|
76
|
||
Item
9
|
133
|
||
Item
9A
|
133
|
||
Item
9B
|
134
|
||
Item
10
|
134*
|
||
Item
11
|
134*
|
||
Item
12
|
134*
|
||
Item
13
|
134*
|
||
Item
14
|
134*
|
||
Item
15
|
135
|
||
138
|
*
|
Information
called for by Part III (Items 10 through 14) is incorporated herein by
reference to the Registrant’s definitive Proxy Statement for the 2010
Annual Meeting of Shareholders to be filed with the Securities and
Exchange Commission on or before April 30,
2010.
|
County
|
Number
of
Branches
|
Deposits
(in
millions)
|
Market
Share
|
Number
of
Competitors
|
|||||||||||||
Anson,
NC
|
1 | $ | 11 | 4.2 | % | 5 | |||||||||||
Beaufort,
NC
|
3 | 48 | 6.3 | % | 6 | ||||||||||||
Bladen,
NC
|
1 | 29 | 11.4 | % | 5 | ||||||||||||
Brunswick,
NC
|
4 | 103 | 4.3 | % | 12 | ||||||||||||
Cabarrus,
NC
|
2 | 36 | 1.9 | % | 11 | ||||||||||||
Carteret,
NC
|
2 | 42 | 4.7 | % | 8 | ||||||||||||
Chatham,
NC
|
2 | 75 | 11.5 | % | 10 | ||||||||||||
Chesterfield,
SC
|
3 | 76 | 21.0 | % | 7 | ||||||||||||
Columbus,
NC
|
2 | 45 | 6.3 | % | 6 | ||||||||||||
Dare,
NC
|
1 | 18 | 1.8 | % | 11 | ||||||||||||
Davidson,
NC
|
3 | 106 | 4.2 | % | 10 | ||||||||||||
Dillon,
SC
|
3 | 72 | 26.6 | % | 3 | ||||||||||||
Duplin,
NC
|
3 | 125 | 26.3 | % | 6 | ||||||||||||
Florence,
SC
|
2 | 34 | 1.7 | % | 14 | ||||||||||||
Guilford,
NC
|
1 | 54 | 0.6 | % | 21 | ||||||||||||
Harnett,
NC
|
3 | 123 | 13.1 | % | 10 | ||||||||||||
Horry,
SC
|
1 | 7 | 0.1 | % | 26 | ||||||||||||
Iredell,
NC
|
2 | 35 | 1.5 | % | 22 | ||||||||||||
Lee,
NC
|
4 | 201 | 24.9 | % | 10 | ||||||||||||
Montgomery,
NC
|
5 | 104 | 38.1 | % | 4 | ||||||||||||
Montgomery,
VA
|
1 | 33 | 1.9 | % | 13 | ||||||||||||
Moore,
NC
|
11 | 464 | 23.6 | % | 11 | ||||||||||||
New
Hanover, NC
|
5 | 194 | 5.0 | % | 19 | ||||||||||||
Onslow,
NC
|
2 | 52 | 4.9 | % | 9 | ||||||||||||
Pulaski,
VA
|
1 | 22 | 5.7 | % | 8 | ||||||||||||
Randolph,
NC
|
4 | 69 | 3.6 | % | 15 | ||||||||||||
Richmond,
NC
|
1 | 23 | 5.0 | % | 6 | ||||||||||||
Robeson,
NC
|
5 | 187 | 17.3 | % | 10 | ||||||||||||
Rockingham,
NC
|
1 | 28 | 2.4 | % | 11 | ||||||||||||
Rowan,
NC
|
2 | 54 | 3.5 | % | 12 | ||||||||||||
Scotland,
NC
|
2 | 59 | 17.7 | % | 6 | ||||||||||||
Stanly,
NC
|
4 | 96 | 10.2 | % | 6 | ||||||||||||
Wake,
NC
|
1 | 16 | 0.1 | % | 30 | ||||||||||||
Washington,
VA
|
1 | 26 | 2.0 | % | 16 | ||||||||||||
Wythe,
VA
|
2 | 62 | 10.7 | % | 10 | ||||||||||||
Brokered
& Internet Deposits
|
- | 204 | |||||||||||||||
Total
|
91 | $ | 2,933 | ||||||||||||||
As
of December 31, 2009
|
||||||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Plan
category
|
Number
of securities to
be
issued upon exercise
of
outstanding options, warrants and rights
|
Weighted-average
exercise price of outstanding options, warrants and
rights
|
Number
of securities available for
future
issuance under equity
compensation
plans (excluding
securities
reflected in column (a))
|
|||||||||
Equity
compensation plans approved by security holders (1)
|
743,828 | $ | 17.80 | 864,941 | ||||||||
Equity
compensation plans not approved by security holders
|
─
|
─
|
─
|
|||||||||
Total
(2)
|
743,828 | $ | 17.80 | 864,941 |
Total
Return Index Values (1)
December
31,
|
||||||||||||||||||||||||
2004
|
2005
|
2006
|
2007
|
2008
|
2009
|
|||||||||||||||||||
First
Bancorp
|
$ | 100.00 | 76.68 | 85.96 | 77.18 | 78.40 | 61.01 | |||||||||||||||||
Russell
2000
|
100.00 | 104.55 | 123.76 | 121.82 | 80.66 | 102.58 | ||||||||||||||||||
SNL
Index-Banks between $1 billion and $5 billion
|
100.00 | 98.29 | 113.74 | 82.85 | 68.72 | 49.26 |
(1)
|
Total
return indices were provided from an independent source, SNL Securities
LP, Charlottesville, Virginia, and assume initial investment of $100 on
December 31, 2004, reinvestment of dividends, and changes in market
values. Total return index numerical values used in this
example are for illustrative purposes
only.
|
Issuer
Purchases of Equity Securities
|
||||||||||||||
Period
|
Total
Number of Shares Purchased (2)
|
Average
Price Paid Per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1)
|
Maximum
Number of Shares That May Yet Be Purchased Under the Plans or Programs
(1)
|
||||||||||
Month
#1 (October 1, 2009 to October 31, 2009)
|
─
|
─
|
─
|
234,667 | ||||||||||
Month
#2 (November 1, 2009 to November 30, 2009)
|
─
|
─
|
─
|
234,667 | ||||||||||
Month
#3 (December 1, 2009 to December 31, 2009)
|
─
|
─
|
─
|
234,667 | ||||||||||
Total
|
─
|
─
|
─
|
234,667 |
|
(1)
|
All
shares available for repurchase are pursuant to publicly announced share
repurchase authorizations. On July 30, 2004, the Company
announced that its Board of Directors had approved the repurchase of
375,000 shares of the Company’s common stock. The repurchase
authorization does not have an expiration date. Subject to the
restrictions discussed above related to the Company’s participation in the
U.S. Treasury’s Capital Purchase Program, there are no plans or programs
the Company has determined to terminate prior to expiration, or under
which the Company does not intend to make further
purchases.
|
|
(2)
|
The
table above does not include shares that were used by option holders to
satisfy the exercise price of the call options issued by the Company to
its employees and directors pursuant to the Company’s stock option
plans. There were no such exercises during the three months
ended December 31, 2009.
|
Financial
Highlights
|
||||||||||||
($
in thousands except per share data)
|
2009
|
2008
|
Change
|
|||||||||
Earnings
|
||||||||||||
Net
interest income
|
$ | 107,096 | 86,559 | 23.7 | % | |||||||
Provision
for loan losses
|
20,186 | 9,880 | 104.3 | % | ||||||||
Noninterest
income
|
89,518 | 20,657 | 333.4 | % | ||||||||
Noninterest
expenses
|
78,551 | 62,211 | 26.3 | % | ||||||||
Income
before income taxes
|
97,877 | 35,125 | 178.7 | % | ||||||||
Income
tax expense
|
37,618 | 13,120 | 186.7 | % | ||||||||
Net
income
|
60,259 | 22,005 | 173.8 | % | ||||||||
Preferred
stock dividends and accretion
|
(3,972 | ) | — | |||||||||
Net
income available to common shareholders
|
$ | 56,287 | 22,005 | 155.8 | % | |||||||
Net
income per common share
|
||||||||||||
Basic
|
$ | 3.38 | 1.38 | 144.9 | % | |||||||
Diluted
|
3.37 | 1.37 | 146.0 | % | ||||||||
At
Year End
|
||||||||||||
Assets
|
$ | 3,545,356 | 2,750,567 | 28.9 | % | |||||||
Loans
|
2,652,865 | 2,211,315 | 20.0 | % | ||||||||
Deposits
|
2,933,108 | 2,074,791 | 41.4 | % | ||||||||
Ratios
|
||||||||||||
Return
on average assets
|
1.82 | % | 0.89 | % | ||||||||
Return
on average common equity
|
22.55 | % | 10.44 | % | ||||||||
Net
interest margin (taxable-equivalent)
|
3.81 | % | 3.74 | % |
Financial
Highlights
|
||||||||||||
($
in thousands except per share data)
|
2008
|
2007
|
Change
|
|||||||||
Earnings
|
||||||||||||
Net
interest income
|
$ | 86,559 | 79,284 | 9.2 | % | |||||||
Provision
for loan losses
|
9,880 | 5,217 | 89.4 | % | ||||||||
Noninterest
income
|
20,657 | 17,217 | 20.0 | % | ||||||||
Noninterest
expenses
|
62,211 | 56,324 | 10.5 | % | ||||||||
Income
before income taxes
|
35,125 | 34,960 | 0.5 | % | ||||||||
Income
tax expense
|
13,120 | 13,150 | -0.2 | % | ||||||||
Net
income
|
$ | 22,005 | 21,810 | 0.9 | % | |||||||
Net
income per share
|
||||||||||||
Basic
|
$ | 1.38 | 1.52 | -9.2 | % | |||||||
Diluted
|
1.37 | 1.51 | -9.3 | % | ||||||||
At
Year End
|
||||||||||||
Assets
|
$ | 2,750,567 | 2,317,249 | 18.7 | % | |||||||
Loans
|
2,211,315 | 1,894,295 | 16.7 | % | ||||||||
Deposits
|
2,074,791 | 1,838,277 | 12.9 | % | ||||||||
Ratios
|
||||||||||||
Return
on average assets
|
0.89 | % | 1.02 | % | ||||||||
Return
on average equity
|
10.44 | % | 12.77 | % | ||||||||
Net
interest margin (taxable-equivalent)
|
3.74 | % | 4.00 | % |
Year
ended December 31,
|
||||||||||||
($
in thousands)
|
2009
|
2008
|
2007
|
|||||||||
Net
interest income, as reported
|
$ | 107,096 | 86,559 | 79,284 | ||||||||
Tax-equivalent
adjustment
|
818 | 658 | 554 | |||||||||
Net
interest income, tax-equivalent
|
$ | 107,914 | 87,217 | 79,838 |
($
in thousands)
|
Year
Ended December 31, 2009
|
|||||||||||
Cooperative
|
Great
Pee Dee
|
Total
|
||||||||||
Interest
income – reduced by premium amortization on loans
|
$ | − | (196 | ) | (196 | ) | ||||||
Interest
income – increased by accretion of loan discount
|
1,469 | − | 1,469 | |||||||||
Interest
expense – reduced by premium amortization of deposits
|
(3,711 | ) | (200 | ) | (3,911 | ) | ||||||
Interest
expense – reduced by premium amortization of borrowings
|
− | (464 | ) | (464 | ) | |||||||
Impact
on net interest income
|
$ | 5,180 | 468 | 5,648 |
($
in thousands)
|
Year
Ended December 31, 2008
|
|||||||||||
Cooperative
|
Great
Pee Dee
|
Total
|
||||||||||
Interest
income – reduced by premium amortization on loans
|
$ | − | (147 | ) | (147 | ) | ||||||
Interest
income – increased by accretion of loan discount
|
− | − | − | |||||||||
Interest
expense – reduced by premium amortization of deposits
|
− | (898 | ) | (898 | ) | |||||||
Interest
expense – reduced by premium amortization of borrowings
|
− | (347 | ) | (347 | ) | |||||||
Impact
on net interest income
|
$ | − | 1,098 | 1,098 |
Cooperative
|
Great
Pee Dee
|
Total
|
||||||||||
Interest
income – reduced by premium amortization on loans
|
$ | − | (147 | ) | (147 | ) | ||||||
Interest
income – increased by accretion of loan discount
|
See
note below
|
− | − | |||||||||
Interest
expense – reduced by premium amortization of deposits
|
(2,211 | ) | − | (2,211 | ) | |||||||
Interest
expense – reduced by premium amortization of borrowings
|
− | (338 | ) | (338 | ) | |||||||
Impact
on net interest income
|
$ | 2,211 | 191 | 2,402 |
($ in
thousands
)
|
Balance
at beginning of period
|
Internal
growth (1)
|
Growth
from Acquisitions
|
Balance
at end of period
|
Total
percentage growth
|
Internal
percentage
growth (1) |
||||||||||||||||||
2009
|
||||||||||||||||||||||||
Loans
|
$ | 2,211,315 | (159,554 | ) | 601,104 | 2,652,865 | 20.0 | % | -7.2 | % | ||||||||||||||
Deposits
– Noninterest bearing
|
229,478 | 7,720 | 35,224 | 272,422 | 18.7 | % | 3.4 | % | ||||||||||||||||
Deposits
– NOW
|
198,775 | 131,576 | 32,015 | 362,366 | 82.3 | % | 66.2 | % | ||||||||||||||||
Deposits
– Money market
|
340,739 | 110,444 | 45,757 | 496,940 | 45.8 | % | 32.4 | % | ||||||||||||||||
Deposits
– Savings
|
125,240 | 2,855 | 21,243 | 149,338 | 19.2 | % | 2.3 | % | ||||||||||||||||
Deposits
– Brokered time
|
78,569 | (45,180 | ) | 42,943 | 76,332 | -2.8 | % | -57.5 | % | |||||||||||||||
Deposits
– Internet time
|
5,206 | (38,854 | ) | 161,672 | 128,024 | n/a | n/a | |||||||||||||||||
Deposits
– Time >$100,000
|
520,198 | 35,826 | 148,104 | 704,128 | 35.4 | % | 6.9 | % | ||||||||||||||||
Deposits
– Time <$100,000
|
576,586 | (58,131 | ) | 225,103 | 743,558 | 29.0 | % | -10.1 | % | |||||||||||||||
Total
deposits
|
$ | 2,074,791 | 146,256 | 712,061 | 2,933,108 | 41.4 | % | 7.0 | % | |||||||||||||||
2008
|
||||||||||||||||||||||||
Loans
|
$ | 1,894,295 | 133,180 | 183,840 | 2,211,315 | 16.7 | % | 7.0 | % | |||||||||||||||
Deposits
– Noninterest bearing
|
232,141 | (11,099 | ) | 8,436 | 229,478 | -1.1 | % | -4.8 | % | |||||||||||||||
Deposits
– NOW
|
192,785 | (4,405 | ) | 10,395 | 198,775 | 3.1 | % | -2.3 | % | |||||||||||||||
Deposits
– Money market
|
264,653 | 61,025 | 15,061 | 340,739 | 28.7 | % | 23.1 | % | ||||||||||||||||
Deposits
– Savings
|
100,955 | 21,697 | 2,588 | 125,240 | 24.1 | % | 21.5 | % | ||||||||||||||||
Deposits
– Brokered time
|
– | 53,012 | 25,557 | 78,569 | n/a | n/a | ||||||||||||||||||
Deposits
– Internet time
|
– | 5,206 | – | 5,206 | n/a | n/a | ||||||||||||||||||
Deposits
– Time >$100,000
|
479,176 | 3,350 | 37,672 | 520,198 | 8.6 | % | 0.7 | % | ||||||||||||||||
Deposits
– Time <$100,000
|
568,567 | (39,981 | ) | 48,000 | 576,586 | 1.4 | % | -7.0 | % | |||||||||||||||
Total
deposits
|
$ | 1,838,277 | 88,805 | 147,709 | 2,074,791 | 12.9 | % | 4.8 | % |
($ in
thousands
)
|
S&P
Issuer
|
Maturity
|
Amortized
|
||||||||||
Issuer
|
Ratings
(1)
|
Date
|
Cost
|
Market
Value
|
|||||||||
First
Citizens Bancorp (South Carolina) Bond
|
BB
|
4/1/15
|
$ | 2,994 | 2,859 | ||||||||
Bank
of America Trust Preferred Security
|
BB
|
12/11/26
|
2,053 | 1,918 | |||||||||
Wells
Fargo Trust Preferred Security
|
A- |
1/15/27
|
2,567 | 2,428 | |||||||||
Bank
of America Trust Preferred Security
|
BB
|
4/15/27
|
5,063 | 4,831 | |||||||||
First
Citizens Bancorp (North Carolina) Trust Preferred Security
|
BB
|
3/1/28
|
2,092 | 1,811 | |||||||||
First
Citizens Bancorp (South Carolina) Trust Preferred Security
|
Not
Rated
|
6/15/34
|
1,000 | 589 | |||||||||
Total
investment in corporate bonds
|
$ | 15,769 | 14,436 |
At
December 31,
2009 (1) |
At
December 31,
2008 |
|||||||
Commercial,
financial, and agricultural
|
$ | 4,033 | 1,726 | |||||
Real
estate – construction, land development, and other land
loans
|
80,669 | 6,936 | ||||||
Real
estate – mortgage – residential (1-4 family) first
mortgages
|
48,424 | 10,856 | ||||||
Real
estate – mortgage – home equity loans/lines of credit
|
16,951 | 2,242 | ||||||
Real
estate – mortgage – commercial and other
|
28,476 | 3,624 | ||||||
Installment
loans to individuals
|
1,569 | 1,216 | ||||||
Total
nonaccrual loans
|
$ | 180,122 | 26,600 |
|
(1)
|
Includes
both covered and non-covered loans.
|
Covered
Nonaccrual Loans
|
Non-covered
Nonaccrual
Loans
|
Total
Nonaccrual Loans
|
||||||||||
Commercial,
financial, and agricultural
|
$ | 263 | 3,770 | 4,033 | ||||||||
Real
estate – construction, land development, and other land
loans
|
54,023 | 26,646 | 80,669 | |||||||||
Real
estate – mortgage – residential (1-4 family) first
mortgages
|
31,315 | 17,109 | 48,424 | |||||||||
Real
estate – mortgage – home equity loans/lines of credit
|
13,451 | 3,500 | 16,951 | |||||||||
Real
estate – mortgage – commercial and other
|
18,595 | 9,881 | 28,476 | |||||||||
Installment
loans to individuals
|
269 | 1,300 | 1,569 | |||||||||
Total
nonaccrual loans
|
$ | 117,916 | 62,206 | 180,122 |
At
December 31, 2009 (1)
|
At
December 31, 2008
|
|||||||
Vacant
land
|
$ | 44,078 | 975 | |||||
1-4
family residential properties
|
10,004 | 2,149 | ||||||
Commercial
real estate
|
2,141 | 1,693 | ||||||
Other
|
– | 15 | ||||||
Total
other real estate
|
$ | 56,223 | 4,832 |
|
(1)
|
Includes
both covered and non-covered real
estate.
|
Covered
Other Real Estate
|
Non-covered
Other Real Estate
|
Total
Other Real Estate
|
||||||||||
Vacant
land
|
$ | 40,836 | 3,242 | 44,078 | ||||||||
1-4
family residential properties
|
6,171 | 3,833 | 10,004 | |||||||||
Commercial
real estate
|
423 | 1,718 | 2,141 | |||||||||
Other
|
– | – | – | |||||||||
Total
other real estate
|
$ | 47,430 | 8,793 | 56,223 |
2009
|
2008
|
2007
|
||||||||||
Noninterest-bearing
deposits
|
9 | % | 11 | % | 13 | % | ||||||
NOW
deposits
|
12 | % | 10 | % | 10 | % | ||||||
Money
market deposits
|
17 | % | 16 | % | 14 | % | ||||||
Savings
deposits
|
5 | % | 6 | % | 6 | % | ||||||
Brokered
deposits
|
3 | % | 4 | % | – | |||||||
Internet
deposits
|
4 | % | 0 | % | – | |||||||
Time
deposits > $100,000
|
24 | % | 25 | % | 26 | % | ||||||
Time
deposits < $100,000
|
26 | % | 28 | % | 31 | % | ||||||
Total
deposits
|
100 | % | 100 | % | 100 | % | ||||||
Securities
sold under agreements to repurchase as a percent of total
deposits
|
2 | % | 3 | % | 2 | % |
Table
1 Selected Consolidated Financial
Data
|
($
in thousands, except per share and nonfinancial data)
|
Year
Ended December 31,
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
Income
Statement Data
|
||||||||||||||||||||
Interest
income
|
$ | 155,991 | 147,862 | 148,942 | 129,207 | 101,429 | ||||||||||||||
Interest
expense
|
48,895 | 61,303 | 69,658 | 54,671 | 32,838 | |||||||||||||||
Net
interest income
|
107,096 | 86,559 | 79,284 | 74,536 | 68,591 | |||||||||||||||
Provision
for loan losses
|
20,186 | 9,880 | 5,217 | 4,923 | 3,040 | |||||||||||||||
Net
interest income after provision
|
86,910 | 76,679 | 74,067 | 69,613 | 65,551 | |||||||||||||||
Noninterest
income
|
89,518 | 20,657 | 17,217 | 14,310 | 15,004 | |||||||||||||||
Noninterest
expense
|
78,551 | 62,211 | 56,324 | 53,198 | 47,636 | |||||||||||||||
Income
before income taxes
|
97,877 | 35,125 | 34,960 | 30,725 | 32,919 | |||||||||||||||
Income
taxes
|
37,618 | 13,120 | 13,150 | 11,423 | 16,829 | |||||||||||||||
Net
income
|
60,259 | 22,005 | 21,810 | 19,302 | 16,090 | |||||||||||||||
Preferred
stock dividends and accretion
|
(3,972 | ) | — | — | — | — | ||||||||||||||
Net
income available to common shareholders
|
56,287 | 22,005 | 21,810 | 19,302 | 16,090 | |||||||||||||||
Earnings
per common share – basic
|
3.38 | 1.38 | 1.52 | 1.35 | 1.14 | |||||||||||||||
Earnings
per common share – diluted
|
3.37 | 1.37 | 1.51 | 1.34 | 1.12 | |||||||||||||||
Per
Share Data (Common)
|
||||||||||||||||||||
Cash
dividends declared - common
|
$ | 0.32 | 0.76 | 0.76 | 0.74 | 0.70 | ||||||||||||||
Market
Price
|
||||||||||||||||||||
High
|
19.00 | 20.86 | 26.72 | 23.90 | 27.88 | |||||||||||||||
Low
|
6.87 | 11.25 | 16.40 | 19.47 | 19.32 | |||||||||||||||
Close
|
13.97 | 18.35 | 18.89 | 21.84 | 20.16 | |||||||||||||||
Stated
book value – common
|
16.59 | 13.27 | 12.11 | 11.34 | 10.94 | |||||||||||||||
Tangible
book value – common
|
12.35 | 9.18 | 8.56 | 7.76 | 7.48 | |||||||||||||||
Selected
Balance Sheet Data (at year end)
|
||||||||||||||||||||
Total
assets
|
$ | 3,545,356 | 2,750,567 | 2,317,249 | 2,136,624 | 1,801,050 | ||||||||||||||
Loans
|
2,652,865 | 2,211,315 | 1,894,295 | 1,740,396 | 1,482,611 | |||||||||||||||
Allowance
for loan losses
|
37,343 | 29,256 | 21,324 | 18,947 | 15,716 | |||||||||||||||
Intangible
assets
|
70,948 | 67,780 | 51,020 | 51,394 | 49,227 | |||||||||||||||
Deposits
|
2,933,108 | 2,074,791 | 1,838,277 | 1,695,679 | 1,494,577 | |||||||||||||||
Borrowings
|
176,811 | 367,275 | 242,394 | 210,013 | 100,239 | |||||||||||||||
Total
shareholders’ equity
|
342,383 | 219,868 | 174,070 | 162,705 | 155,728 | |||||||||||||||
Selected
Average Balances
|
||||||||||||||||||||
Assets
|
$ | 3,097,137 | 2,484,296 | 2,139,576 | 1,922,510 | 1,709,380 | ||||||||||||||
Loans
– Non-covered
|
2,176,153 | 2,117,028 | 1,808,219 | 1,623,188 | 1,422,419 | |||||||||||||||
Loans
– Covered
|
298,892 | — | — | — | — | |||||||||||||||
Loans
– Total
|
2,475,045 | 2,117,028 | 1,808,219 | 1,623,188 | 1,422,419 | |||||||||||||||
Earning
assets
|
2,833,167 | 2,329,025 | 1,998,428 | 1,793,811 | 1,593,554 | |||||||||||||||
Deposits
|
2,549,709 | 1,985,332 | 1,780,265 | 1,599,575 | 1,460,620 | |||||||||||||||
Interest-bearing
liabilities
|
2,497,304 | 2,019,256 | 1,726,002 | 1,537,385 | 1,359,744 | |||||||||||||||
Shareholders’
equity
|
313,173 | 210,810 | 170,857 | 163,193 | 154,871 | |||||||||||||||
Ratios
|
||||||||||||||||||||
Return
on average assets
|
1.82 | % | 0.89 | % | 1.02 | % | 1.00 | % | 0.94 | % | ||||||||||
Return
on average common equity
|
22.55 | % | 10.44 | % | 12.77 | % | 11.83 | % | 10.39 | % | ||||||||||
Net
interest margin (taxable-equivalent basis)
|
3.81 | % | 3.74 | % | 4.00 | % | 4.18 | % | 4.33 | % | ||||||||||
Equity
to assets at year end
|
9.66 | % | 7.99 | % | 7.51 | % | 7.62 | % | 8.65 | % | ||||||||||
Tangible
common equity to tangible assets
|
5.94 | % | 5.67 | % | 5.43 | % | 5.34 | % | 6.08 | % | ||||||||||
Loans
to deposits at year end
|
90.45 | % | 106.58 | % | 103.05 | % | 102.64 | % | 99.20 | % | ||||||||||
Allowance
for loan losses to total loans
|
1.41 | % | 1.32 | % | 1.13 | % | 1.09 | % | 1.06 | % | ||||||||||
Allowance
for loan losses to non-covered loans
|
1.75 | % | 1.32 | % | 1.13 | % | 1.09 | % | 1.06 | % | ||||||||||
Nonperforming
assets to total assets at year end
|
7.27 | % | 1.29 | % | 0.47 | % | 0.39 | % | 0.17 | % | ||||||||||
Non-covered
nonperforming assets to total non-covered assets at year
end
|
3.10 | % | 1.29 | % | 0.47 | % | 0.39 | % | 0.17 | % | ||||||||||
Net
charge-offs to average total loans
|
0.49 | % | 0.24 | % | 0.16 | % | 0.11 | % | 0.14 | % | ||||||||||
Net
charge-offs to average non-covered loans
|
0.56 | % | 0.24 | % | 0.16 | % | 0.11 | % | 0.14 | % | ||||||||||
Efficiency
ratio
|
39.79 | % | 57.67 | % | 58.03 | % | 59.54 | % | 56.68 | % | ||||||||||
Nonfinancial
Data
|
||||||||||||||||||||
Number
of branches
|
91 | 74 | 70 | 68 | 61 | |||||||||||||||
Number
of employees – Full time equivalents
|
764 | 650 | 614 | 620 | 578 |
Table
2 Average Balances and Net Interest Income
Analysis
|
Year
Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||||||||||||||
($
in thousands)
|
Average
Volume
|
Avg.
Rate
|
Interest
Earned
or
Paid
|
Average
Volume
|
Avg.
Rate
|
Interest
Earned
or
Paid
|
Average
Volume
|
Avg.
Rate
|
Interest
Earned
or
Paid
|
|||||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||||||||||
Loans
(1)
|
$ | 2,475,045 | 5.98 | % | $ | 148,007 | $ | 2,117,028 | 6.56 | % | $ | 138,878 | $ | 1,808,219 | 7.70 | % | $ | 139,323 | ||||||||||||||||||
Taxable
securities
|
167,041 | 3.94 | % | 6,580 | 152,246 | 4.82 | % | 7,333 | 131,035 | 4.92 | % | 6,453 | ||||||||||||||||||||||||
Non-taxable
securities (2)
|
23,018 | 7.29 | % | 1,677 | 16,258 | 7.98 | % | 1,298 | 13,786 | 8.09 | % | 1,115 | ||||||||||||||||||||||||
Short-term
investments, primarily overnight funds
|
168,063 | 0.32 | % | 545 | 43,493 | 2.32 | % | 1,011 | 45,388 | 5.74 | % | 2,605 | ||||||||||||||||||||||||
Total
interest- earning assets
|
2,833,167 | 5.53 | % | 156,809 | 2,329,025 | 6.38 | % | 148,520 | 1,998,428 | 7.48 | % | 149,496 | ||||||||||||||||||||||||
Cash
and due from banks
|
42,350 | 39,627 | 38,906 | |||||||||||||||||||||||||||||||||
Bank
premises and equipment, net
|
52,789 | 49,815 | 45,398 | |||||||||||||||||||||||||||||||||
Other
assets
|
168,831 | 65,829 | 56,844 | |||||||||||||||||||||||||||||||||
Total
assets
|
$ | 3,097,137 | $ | 2,484,296 | $ | 2,139,576 | ||||||||||||||||||||||||||||||
Liabilities
and Equity
|
||||||||||||||||||||||||||||||||||||
NOW
accounts
|
$ | 244,863 | 0.29 | % | $ | 720 | $ | 197,459 | 0.19 | % | $ | 377 | $ | 192,407 | 0.37 | % | $ | 712 | ||||||||||||||||||
Money
market accounts
|
429,068 | 1.52 | % | 6,537 | 309,917 | 2.36 | % | 7,311 | 239,258 | 3.31 | % | 7,929 | ||||||||||||||||||||||||
Savings
accounts
|
137,142 | 1.08 | % | 1,487 | 124,460 | 1.65 | % | 2,048 | 106,357 | 1.62 | % | 1,727 | ||||||||||||||||||||||||
Time
deposits >$100,000
|
745,159 | 2.54 | % | 18,908 | 532,566 | 4.00 | % | 21,308 | 450,801 | 5.03 | % | 22,687 | ||||||||||||||||||||||||
Other
time deposits
|
736,358 | 2.43 | % | 17,866 | 586,235 | 3.79 | % | 22,197 | 567,572 | 4.67 | % | 26,498 | ||||||||||||||||||||||||
Total
interest-bearing deposits
|
2,292,590 | 1.99 | % | 45,518 | 1,750,637 | 3.04 | % | 53,241 | 1,556,395 | 3.83 | % | 59,553 | ||||||||||||||||||||||||
Securities
sold under agreements to repurchase
|
53,537 | 1.37 | % | 736 | 42,097 | 2.15 | % | 903 | 39,220 | 3.76 | % | 1,476 | ||||||||||||||||||||||||
Borrowings
|
151,177 | 1.75 | % | 2,641 | 226,522 | 3.16 | % | 7,159 | 130,387 | 6.62 | % | 8,629 | ||||||||||||||||||||||||
Total
interest- bearing liabilities
|
2,497,304 | 1.96 | % | 48,895 | 2,019,256 | 3.04 | % | 61,303 | 1,726,002 | 4.04 | % | 69,658 | ||||||||||||||||||||||||
Non-interest-
bearing deposits
|
257,119 | 234,695 | 223,870 | |||||||||||||||||||||||||||||||||
Other
liabilities
|
29,541 | 19,535 | 18,847 | |||||||||||||||||||||||||||||||||
Shareholders’
equity
|
313,173 | 210,810 | 170,857 | |||||||||||||||||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 3,097,137 | $ | 2,484,296 | $ | 2,139,576 | ||||||||||||||||||||||||||||||
Net
yield on interest- earning assets and net interest income
|
3.81 | % | $ | 107,914 | 3.74 | % | $ | 87,217 | 4.00 | % | $ | 79,838 | ||||||||||||||||||||||||
Interest
rate spread
|
3.57 | % | 3.34 | % | 3.44 | % | ||||||||||||||||||||||||||||||
Average
prime rate
|
3.25 | % | 5.09 | % | 8.05 | % |
|
(1)
|
Average
loans include nonaccruing loans, the effect of which is to lower the
average rate shown. Interest earned includes recognized loan
fees in the amounts of $144,000, $405,000, and $836,000 for 2009, 2008,
and 2007, respectively.
|
(2)
|
Includes
tax-equivalent adjustments of $818,000, $658,000, and $554,000 in 2009,
2008, and 2007, respectively, to reflect the federal and state benefit of
the tax-exempt securities (using a 39% combined tax rate), reduced by the
related nondeductible portion of interest
expense.
|
Table
3 Volume and Rate Variance
Analysis
|
Year
Ended December 31, 2009
|
Year
Ended December 31, 2008
|
|||||||||||||||||||||||
Change
Attributable to
|
Change
Attributable to
|
|||||||||||||||||||||||
(In
thousands)
|
Changes
in Volumes
|
Changes
in Rates
|
Total
Increase (Decrease)
|
Changes in
Volumes
|
Changes
in Rates
|
Total
Increase (Decrease)
|
||||||||||||||||||
Interest
income (tax-equivalent):
|
||||||||||||||||||||||||
Loans
|
$ | 22,448 | (13,319 | ) | 9,129 | 22,026 | (22,471 | ) | (445 | ) | ||||||||||||||
Taxable
securities
|
648 | (1,401 | ) | (753 | ) | 1,033 | (153 | ) | 880 | |||||||||||||||
Non-taxable
securities
|
516 | (137 | ) | 379 | 199 | (16 | ) | 183 | ||||||||||||||||
Short-term
investments, primarily overnight funds
|
1,650 | (2,116 | ) | (466 | ) | (76 | ) | (1,518 | ) | (1,594 | ) | |||||||||||||
Total
interest income
|
25,262 | (16,973 | ) | 8,289 | 23,182 | (24,158 | ) | (976 | ) | |||||||||||||||
Interest
expense:
|
||||||||||||||||||||||||
NOW
accounts
|
115 | 228 | 343 | 14 | (349 | ) | (335 | ) | ||||||||||||||||
Money
Market accounts
|
2,313 | (3,087 | ) | (774 | ) | 2,004 | (2,622 | ) | (618 | ) | ||||||||||||||
Savings
accounts
|
173 | (734 | ) | (561 | ) | 296 | 25 | 321 | ||||||||||||||||
Time
deposits>$100,000
|
6,950 | (9,350 | ) | (2,400 | ) | 3,693 | (5,072 | ) | (1,379 | ) | ||||||||||||||
Other
time deposits
|
4,663 | (8,994 | ) | (4,331 | ) | 789 | (5,090 | ) | (4,301 | ) | ||||||||||||||
Total
interest-bearing deposits
|
14,214 | (21,937 | ) | (7,723 | ) | 6,796 | (13,108 | ) | (6,312 | ) | ||||||||||||||
Securities
sold under agreements to repurchase
|
201 | (368 | ) | (167 | ) | 85 | (658 | ) | (573 | ) | ||||||||||||||
Borrowings
|
(1,849 | ) | (2,669 | ) | (4,518 | ) | 4,700 | (6,170 | ) | (1,470 | ) | |||||||||||||
Total
interest expense
|
12,566 | (24,974 | ) | (12,408 | ) | 11,581 | (19,936 | ) | (8,355 | ) | ||||||||||||||
Net
interest income (tax-equivalent)
|
$ | 12,696 | 8,001 | 20,697 | 11,601 | (4,222 | ) | 7,379 |
Table 4 Noninterest Income |
Year
Ended December 31,
|
||||||||||||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Service
charges on deposit accounts
|
$ | 13,854 | 13,535 | 9,988 | ||||||||
Other
service charges, commissions, and fees
|
4,848 | 4,392 | 3,902 | |||||||||
Fees
from presold mortgages
|
1,505 | 869 | 1,135 | |||||||||
Commissions
from sales of insurance and financial products
|
1,524 | 1,552 | 1,511 | |||||||||
Data
processing fees
|
139 | 167 | 204 | |||||||||
Total
core noninterest income
|
21,870 | 20,515 | 16,740 | |||||||||
Gain
from acquisition
|
67,894 | — | — | |||||||||
Securities
gains (losses), net
|
(104 | ) | (14 | ) | 487 | |||||||
Other
gains (losses), net
|
(142 | ) | 156 | (10 | ) | |||||||
Total
|
$ | 89,518 | 20,657 | 17,217 |
Table
5 Noninterest Expenses
|
Year
Ended December 31,
|
||||||||||||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Salaries
|
$ | 30,745 | 28,127 | 26,227 | ||||||||
Employee
benefits
|
10,843 | 7,319 | 7,443 | |||||||||
Total
personnel expense
|
41,588 | 35,446 | 33,670 | |||||||||
Occupancy
expense
|
6,071 | 4,175 | 3,795 | |||||||||
Equipment
related expenses
|
4,334 | 4,105 | 3,809 | |||||||||
Amortization
of intangible assets
|
630 | 416 | 374 | |||||||||
Acquisition
expenses
|
1,343 | — | — | |||||||||
FDIC
insurance expense
|
5,500 | 1,157 | 100 | |||||||||
Stationery
and supplies
|
2,181 | 1,903 | 1,593 | |||||||||
Telephone
|
1,847 | 1,349 | 1,246 | |||||||||
Non-credit
losses
|
255 | 200 | 204 | |||||||||
Other
operating expenses
|
14,802 | 13,460 | 11,533 | |||||||||
Total
|
$ | 78,551 | 62,211 | 56,324 |
Table
6 Income Taxes
|
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Current -
Federal
|
$ | 11,190 | 11,978 | 11,625 | ||||||||
- State
|
1,830 | 1,962 | 1,938 | |||||||||
Deferred -
Federal
|
20,545 | (703 | ) | (348 | ) | |||||||
-
State
|
4,053 | (117 | ) | (65 | ) | |||||||
Total
|
$ | 37,618 | 13,120 | 13,150 | ||||||||
Effective
tax rate
|
38.4 | % | 37.4 | % | 37.6 | % |
Table
7 Distribution of Assets and
Liabilities
|
As
of December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Assets
|
||||||||||||
Interest-earning
assets
|
||||||||||||
Net
loans
|
74 | % | 80 | % | 81 | % | ||||||
Securities
available for sale
|
5 | 6 | 6 | |||||||||
Securities
held to maturity
|
1 | 1 | 1 | |||||||||
Short
term investments
|
8 | 5 | 6 | |||||||||
Total
interest-earning assets
|
88 | 92 | 94 | |||||||||
Noninterest-earning
assets
|
||||||||||||
Cash
and due from banks
|
2 | 3 | 1 | |||||||||
Premises
and equipment
|
2 | 2 | 2 | |||||||||
FDIC
loss share receivable
|
4 | — | — | |||||||||
Other
assets
|
4 | 3 | 3 | |||||||||
Total
assets
|
100 | % | 100 | % | 100 | % | ||||||
Liabilities
and shareholders’ equity
|
||||||||||||
Demand
deposits – noninterest bearing
|
8 | % | 8 | % | 10 | % | ||||||
NOW
deposits
|
10 | 7 | 8 | |||||||||
Money
market deposits
|
14 | 12 | 11 | |||||||||
Savings
deposits
|
4 | 5 | 4 | |||||||||
Time
deposits of $100,000 or more
|
23 | 22 | 21 | |||||||||
Other
time deposits
|
23 | 22 | 25 | |||||||||
Total
deposits
|
82 | 76 | 79 | |||||||||
Securities
sold under agreements to repurchase
|
2 | 2 | 2 | |||||||||
Borrowings
|
5 | 13 | 10 | |||||||||
Accrued
expenses and other liabilities
|
1 | 1 | 1 | |||||||||
Total
liabilities
|
90 | 92 | 92 | |||||||||
Shareholders’
equity
|
10 | 8 | 8 | |||||||||
Total
liabilities and shareholders’ equity
|
100 | % | 100 | % | 100 | % |
Table 8 Securities Portfolio Composition |
As
of December 31,
|
||||||||||||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Securities
available for sale:
|
||||||||||||
Government-sponsored
enterprise securities
|
$ | 36,518 | 90,424 | 69,893 | ||||||||
Mortgage-backed
securities
|
111,797 | 46,962 | 39,296 | |||||||||
Corporate
bonds
|
14,436 | 16,848 | 13,855 | |||||||||
Equity
securities
|
17,004 | 16,959 | 12,070 | |||||||||
Total
securities available for sale
|
179,755 | 171,193 | 135,114 | |||||||||
Securities
held to maturity:
|
||||||||||||
State
and local governments
|
34,394 | 15,967 | 16,611 | |||||||||
Other
|
19 | 23 | 29 | |||||||||
Total
securities held to maturity
|
34,413 | 15,990 | 16,640 | |||||||||
Total
securities
|
$ | 214,168 | 187,183 | 151,754 | ||||||||
Average
total securities during year
|
$ | 190,059 | 168,504 | 144,821 |
Table
9 Securities Portfolio Maturity
Schedule
|
As
of December 31,
|
||||||||||||
2009
|
||||||||||||
($
in thousands)
|
Book
Value
|
Fair
Value |
Book
Yield (1) |
|||||||||
Securities
available for sale:
|
||||||||||||
Government-sponsored
enterprise securities
|
||||||||||||
Due
within one year
|
$ | 5,064 | 5,077 | 0.62 | % | |||||||
Due
after one but within five years
|
31,042 | 31,441 | 3.49 | % | ||||||||
Total
|
36,106 | 36,518 | 3.09 | % | ||||||||
Mortgage-backed
securities (2)
|
||||||||||||
Due
within one year
|
10,287 | 10,579 | 2.39 | % | ||||||||
Due
after one but within five years
|
68,000 | 69,798 | 3.66 | % | ||||||||
Due
after five but within ten years
|
17,154 | 17,154 | 3.80 | % | ||||||||
Due
after ten years
|
13,989 | 14,266 | 5.08 | % | ||||||||
Total
|
109,430 | 111,797 | 3.74 | % | ||||||||
Corporate
debt securities
|
||||||||||||
Due
after five but within ten years
|
2,994 | 2,859 | 6.84 | % | ||||||||
Due
after ten years
|
12,775 | 11,577 | 7.45 | % | ||||||||
Total
|
15,769 | 14,436 | 7.33 | % | ||||||||
Equity
securities
|
16,618 | 17,004 | 0.41 | % | ||||||||
Total
securities available for sale
|
||||||||||||
Due
within one year
|
15,351 | 15,656 | 1.80 | % | ||||||||
Due
after one but within five years
|
99,042 | 101,239 | 3.61 | % | ||||||||
Due
after five but within ten years
|
20,148 | 20,013 | 4.25 | % | ||||||||
Due
after ten years
|
26,764 | 25,843 | 6.21 | % | ||||||||
Equity
securities
|
16,618 | 17,004 | 0.41 | % | ||||||||
Total
|
$ | 177,923 | 179,755 | 3.62 | % | |||||||
Securities
held to maturity:
|
||||||||||||
State
and local governments
|
||||||||||||
Due
within one year
|
$ | 1,006 | 1,014 | 6.44 | % | |||||||
Due
after one but within five years
|
1,801 | 1,867 | 6.23 | % | ||||||||
Due
after five but within ten years
|
10,571 | 10,866 | 5.86 | % | ||||||||
Due
after ten years
|
21,016 | 21,181 | 5.89 | % | ||||||||
Total
|
34,394 | 34,928 | 5.91 | % | ||||||||
Other
|
||||||||||||
Due
after one but within five years
|
19 | 19 | 4.88 | % | ||||||||
Total
|
19 | 19 | 4.88 | % | ||||||||
Total
securities held to maturity
|
||||||||||||
Due
within one year
|
1,006 | 1,014 | 6.44 | % | ||||||||
Due
after one but within five years
|
1,820 | 1,886 | 6.21 | % | ||||||||
Due
after five but within ten years
|
10,571 | 10,866 | 5.86 | % | ||||||||
Due
after ten years
|
21,016 | 21,181 | 5.89 | % | ||||||||
Total
|
$ | 34,413 | 34,947 | 5.91 | % |
(1)
|
Yields
on tax-exempt investments have been adjusted to a taxable equivalent basis
using a 39% tax rate.
|
(2)
|
Mortgage-backed
securities are shown maturing in the periods consistent with their
estimated lives based on expected prepayment
speeds.
|
Table
10 Loan Portfolio
Composition
|
As
of December 31,
|
||||||||||||||||||||||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||||||||||||||||||||||
($
in thousands)
|
Amount
|
%
of
Total
Loans
|
Amount
|
%
of
Total
Loans
|
Amount
|
%
of
Total
Loans
|
Amount
|
%
of
Total
Loans
|
Amount
|
%
of
Total
Loans
|
||||||||||||||||||||||||||||||
Commercial,
financial, and agricultural
|
$ | 173,611 | 7 | % | $ | 190,428 | 9 | % | $ | 166,925 | 9 | % | $ | 159,458 | 9 | % | $ | 137,923 | 9 | % | ||||||||||||||||||||
Real
estate – construction, land development & other land
loans
|
551,714 | 21 | % | 481,849 | 22 | % | 446,437 | 23 | % | 274,030 | 16 | % | 168,516 | 11 | % | |||||||||||||||||||||||||
Real
estate – mortgage – residential (1-4 family) first
mortgages
|
849,875 | 32 | % | 576,884 | 26 | % | 456,102 | 24 | % | 507,975 | 29 | % | 494,833 | 33 | % | |||||||||||||||||||||||||
Real
estate – mortgage – home equity loans / lines of credit
|
270,054 | 10 | % | 249,764 | 11 | % | 209,852 | 11 | % | 205,284 | 12 | % | 169,964 | 12 | % | |||||||||||||||||||||||||
Real
estate – mortgage – commercial and other
|
718,723 | 27 | % | 620,444 | 28 | % | 523,008 | 28 | % | 511,039 | 29 | % | 440,337 | 30 | % | |||||||||||||||||||||||||
Installment
loans to individuals
|
88,514 | 3 | % | 91,711 | 4 | % | 91,825 | 5 | % | 82,583 | 5 | % | 70,854 | 5 | % | |||||||||||||||||||||||||
Loans,
gross
|
2,652,491 | 100 | % | 2,211,080 | 100 | % | 1,894,149 | 100 | % | 1,740,369 | 100 | % | 1,482,427 | 100 | % | |||||||||||||||||||||||||
Unamortized
net deferred loan costs/ (fees)
|
374 | 235 | 146 | 27 | 184 | |||||||||||||||||||||||||||||||||||
Total
loans, net
|
$ | 2,652,865 | $ | 2,211,315 | $ | 1,894,295 | $ | 1,740,396 | $ | 1,482,611 |
Table
10a Loan Portfolio Composition – Covered versus
Non-covered
|
As
of December 31, 2009
|
||||||||||||||||||||||||||||||||
Covered
Loans (Carrying Value)
|
Non-covered
Loans
|
Total
Loans
|
Unpaid
Principal Balance of Covered Loans
|
Carrying
Value of Covered Loans as a Percent of the Unpaid
Balance
|
||||||||||||||||||||||||||||
($
in thousands)
|
Amount
|
%
of
Covered
Loans
|
Amount
|
%
of
Non-covered
Loans
|
Amount
|
%
of
Total
Loans
|
Amount
|
Percentage
|
||||||||||||||||||||||||
Commercial,
financial, and agricultural
|
$ | 9,386 | 2 | % | $ | 164,225 | 8 | % | $ | 173,611 | 7 | % | $ | 12,406 | 76 | % | ||||||||||||||||
Real
estate – construction, land development & other land
loans
|
143,256 | 28 | % | 408,458 | 19 | % | 551,714 | 21 | % | 254,897 | 56 | % | ||||||||||||||||||||
Real
estate – mortgage – residential (1-4 family) first
mortgages
|
255,405 | 49 | % | 594,470 | 28 | % | 849,875 | 32 | % | 329,141 | 78 | % | ||||||||||||||||||||
Real
estate – mortgage – home equity loans / lines of credit
|
22,059 | 4 | % | 247,995 | 11 | % | 270,054 | 10 | % | 24,504 | 90 | % | ||||||||||||||||||||
Real
estate – mortgage – commercial and other
|
85,738 | 16 | % | 632,985 | 30 | % | 718,723 | 27 | % | 108,908 | 79 | % | ||||||||||||||||||||
Installment
loans to individuals
|
4,178 | 1 | % | 84,336 | 4 | % | 88,514 | 3 | % | 4,673 | 89 | % | ||||||||||||||||||||
Loans,
gross
|
520,022 | 100 | % | 2,132,469 | 100 | % | 2,652,491 | 100 | % | $ | 734,529 | 71 | % | |||||||||||||||||||
Unamortized
net deferred loan costs/ (fees)
|
– | 374 | 374 | |||||||||||||||||||||||||||||
Total
loans, net
|
$ | 520,022 | $ | 2,132,843 | $ | 2,652,865 |
Table
11 Loan Maturities
|
As
of December 31, 2009
|
||||||||||||||||||||||||||||||||
Due
within
one
year
|
Due
after one year but
within
five years
|
Due
after five
years
|
Total
|
|||||||||||||||||||||||||||||
($
in thousands)
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
||||||||||||||||||||||||
Variable
Rate Loans:
|
||||||||||||||||||||||||||||||||
Commercial,
financial, and agricultural
|
$ | 62,767 | 5.27 | % | $ | 19,662 | 4.54 | % | $ | 1,336 | 3.93 | % | $ | 83,765 | 5.08 | % | ||||||||||||||||
Real
estate – construction only
|
130,802 | 5.02 | % | 4,970 | 4.75 | % | 922 | 4.99 | % | 136,694 | 5.01 | % | ||||||||||||||||||||
Real
estate – all other mortgage
|
276,296 | 4.88 | % | 205,101 | 4.89 | % | 494,140 | 5.05 | % | 975,537 | 4.97 | % | ||||||||||||||||||||
Installment
loans to individuals
|
403 | 5.67 | % | 8,753 | 9.31 | % | 15,880 | 5.30 | % | 25,036 | 6.71 | % | ||||||||||||||||||||
Total
at variable rates
|
470,268 | 4.97 | % | 238,486 | 5.02 | % | 512,278 | 5.05 | % | 1,221,032 | 5.02 | % | ||||||||||||||||||||
Fixed
Rate Loans:
|
||||||||||||||||||||||||||||||||
Commercial,
financial, and agricultural
|
28,190 | 6.99 | % | 56,210 | 6.98 | % | 9,199 | 6.18 | % | 93,599 | 6.90 | % | ||||||||||||||||||||
Real
estate – construction only
|
11,162 | 5.82 | % | 6,653 | 6.49 | % | 1,286 | 5.92 | % | 19,101 | 6.06 | % | ||||||||||||||||||||
Real
estate – all other mortgage
|
219,678 | 6.80 | % | 730,437 | 6.76 | % | 136,219 | 6.47 | % | 1,086,334 | 6.73 | % | ||||||||||||||||||||
Installment
loans to individuals
|
11,144 | 7.67 | % | 40,452 | 9.51 | % | 1,081 | 7.48 | % | 52,677 | 9.08 | % | ||||||||||||||||||||
Total
at fixed rates
|
270,174 | 6.82 | % | 833,752 | 6.91 | % | 147,785 | 6.45 | % | 1,251,711 | 6.83 | % | ||||||||||||||||||||
Subtotal
|
740,442 | 5.64 | % | 1,072,238 | 6.49 | % | 660,063 | 5.36 | % | 2,472,743 | 5.94 | % | ||||||||||||||||||||
Nonaccrual
loans
|
180,122 |
─
|
─
|
180,122 | ||||||||||||||||||||||||||||
Total
loans
|
$ | 920,564 | $ | 1,072,238 | $ | 660,063 | $ | 2,652,865 |
Table
12 Nonperforming Assets
|
As
of December 31,
|
||||||||||||||||||||
($
in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Nonaccrual
loans – non-covered
|
$ | 62,206 | 26,600 | 7,807 | 6,852 | 1,640 | ||||||||||||||
Nonaccrual
loans – covered by FDIC loss share (1)
|
117,916 | - | - | - | - | |||||||||||||||
Troubled
debt restructurings – non-covered
|
21,283 | 3,995 | 6 | 10 | 13 | |||||||||||||||
Accruing
loans >90 days past due
|
- | - | - | - | - | |||||||||||||||
Total
nonperforming loans
|
201,405 | 30,595 | 7,813 | 6,862 | 1,653 | |||||||||||||||
Other
real estate – non-covered
|
8,793 | 4,832 | 3,042 | 1,539 | 1,421 | |||||||||||||||
Other
real estate – covered by FDIC loss share
|
47,430 | - | - | - | - | |||||||||||||||
Total
nonperforming assets
|
$ | 257,628 | 35,427 | 10,855 | 8,401 | 3,074 | ||||||||||||||
Total
nonperforming assets – non-covered
|
$ | 92,282 | 35,427 | 10,855 | 8,401 | 3,074 | ||||||||||||||
Asset Quality Ratios – All
Assets
|
||||||||||||||||||||
Nonperforming
loans as a percentage of total loans
|
7.59 | % | 1.38 | % | 0.41 | % | 0.39 | % | 0.11 | % | ||||||||||
Nonperforming
assets as a percentage of total loans and other real
estate
|
9.51 | % | 1.60 | % | 0.57 | % | 0.48 | % | 0.21 | % | ||||||||||
Nonperforming
assets as a percentage of total assets
|
7.27 | % | 1.29 | % | 0.47 | % | 0.39 | % | 0.17 | % | ||||||||||
Allowance
for loan losses as a percentage of nonperforming loans
|
18.54 | % | 95.62 | % | 272.93 | % | 276.11 | % | 950.76 | % | ||||||||||
Asset Quality Ratios – Based on Non-covered Assets
only
|
||||||||||||||||||||
Non-covered
nonperforming loans as a percentage of non-covered loans
|
3.91 | % | 1.38 | % | 0.41 | % | 0.39 | % | 0.11 | % | ||||||||||
Non-covered
nonperforming assets as a percentage of
non-covered loans and non-covered other real
estate
|
4.31 | % | 1.60 | % | 0.57 | % | 0.48 | % | 0.21 | % | ||||||||||
Non-covered
nonperforming assets as a percentage of total non-covered
assets
|
3.10 | % | 1.29 | % | 0.47 | % | 0.39 | % | 0.17 | % | ||||||||||
Allowance
for loan losses as a percentage of non-covered nonperforming
loans
|
44.73 | % | 95.62 | % | 272.93 | % | 276.11 | % | 950.76 | % | ||||||||||
(1)
At December 31, 2009, the contractual balance of the nonaccrual loans
covered by the FDIC loss share agreement was $192.1
million.
|
Table
12a Nonperforming Assets by Geographical
Region
|
As
of December 31, 2009
|
||||||||||||||||||||
($
in thousands)
|
Covered
|
Non-covered
|
Total
|
Total
Loans
|
Nonperforming
Loans to Total Loans
|
|||||||||||||||
Nonaccrual
loans and Troubled Debt Restructurings (1)
|
||||||||||||||||||||
Eastern
Region (NC)
|
$ | 116,442 | 23,126 | 139,568 | $ | 765,000 | 18.2 | % | ||||||||||||
Triangle
Region (NC)
|
– | 21,875 | 21,875 | 764,000 | 2.9 | % | ||||||||||||||
Triad
Region (NC)
|
– | 11,847 | 11,847 | 415,000 | 2.9 | % | ||||||||||||||
Charlotte
Region (NC)
|
– | 5,212 | 5,212 | 111,000 | 4.7 | % | ||||||||||||||
Southern
Piedmont Region (NC)
|
– | 3,382 | 3,382 | 242,000 | 1.4 | % | ||||||||||||||
South
Carolina Region
|
1,474 | 13,995 | 15,469 | 189,000 | 8.2 | % | ||||||||||||||
Virginia
Region
|
– | 2,555 | 2,555 | 159,000 | 1.6 | % | ||||||||||||||
Other
|
– | 1,497 | 1,497 | 8,000 | 18.7 | % | ||||||||||||||
Total
nonaccrual loans and troubled debt restructurings
|
$ | 117,916 | 83,489 | 201,405 | $ | 2,653,000 | 7.6 | % | ||||||||||||
Other
Real Estate (1)
|
||||||||||||||||||||
Eastern
Region (NC)
|
$ | 47,166 | 1,712 | 48,878 | ||||||||||||||||
Triangle
Region (NC)
|
– | 1,525 | 1,525 | |||||||||||||||||
Triad
Region (NC)
|
– | 2,732 | 2,732 | |||||||||||||||||
Charlotte
Region (NC)
|
– | 719 | 719 | |||||||||||||||||
Southern
Piedmont Region (NC)
|
– | 306 | 306 | |||||||||||||||||
South
Carolina Region
|
264 | 696 | 960 | |||||||||||||||||
Virginia
Region
|
– | – | – | |||||||||||||||||
Other
|
– | 1,103 | 1,103 | |||||||||||||||||
Total
other real estate
|
$ | 47,430 | 8,793 | 56,223 | ||||||||||||||||
(1) See
the counties that comprise each region in Note 12 to the consolidated
financial statements.
|
Table
13 Allocation of the Allowance for Loan
Losses
|
As
of December 31,
|
||||||||||||||||||||
($
in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Commercial,
financial, and agricultural
|
$ | 6,210 | 4,913 | 3,516 | 3,548 | 2,686 | ||||||||||||||
Real
estate – construction
|
3,974 | 1,977 | 1,827 | 1,182 | 798 | |||||||||||||||
Real
estate – mortgage
|
24,689 | 19,543 | 13,477 | 12,186 | 10,445 | |||||||||||||||
Installment
loans to individuals
|
2,460 | 2,815 | 2,486 | 2,026 | 1,763 | |||||||||||||||
Total
allocated
|
37,333 | 29,248 | 21,306 | 18,942 | 15,692 | |||||||||||||||
Unallocated
|
10 | 8 | 18 | 5 | 24 | |||||||||||||||
Total
|
$ | 37,343 | 29,256 | 21,324 | 18,947 | 15,716 |
Table
14 Loan Loss and Recovery
Experience
|
As
of December 31,
|
||||||||||||||||||||
($
in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Loans
outstanding at end of year
|
$ | 2,652,865 | 2,211,315 | 1,894,295 | 1,740,396 | 1,482,611 | ||||||||||||||
Non-covered
loans outstanding at end of year
|
$ | 2,132,843 | 2,211,315 | 1,894,295 | 1,740,396 | 1,482,611 | ||||||||||||||
Covered
loans outstanding at end of year
|
$ | 520,022 | – | – | – | – | ||||||||||||||
Average
amount of non-covered loans outstanding
|
$ | 2,160,225 | 2,117,028 | 1,808,219 | 1,623,188 | 1,422,419 | ||||||||||||||
Allowance
for loan losses, at beginning of year
|
$ | 29,256 | 21,324 | 18,947 | 15,716 | 14,717 | ||||||||||||||
Provision
for loan losses
|
20,186 | 9,880 | 5,217 | 4,923 | 3,040 | |||||||||||||||
Additions
related to loans assumed in corporate acquisitions
|
– | 3,158 | – | 52 | – | |||||||||||||||
49,442 | 34,362 | 24,164 | 20,691 | 17,757 | ||||||||||||||||
Loans
charged off:
|
||||||||||||||||||||
Commercial,
financial, and agricultural
|
(2,143 | ) | (992 | ) | (982 | ) | (486 | ) | (756 | ) | ||||||||||
Real
estate – construction, land development & other land
loans
|
(1,716 | ) | (309 | ) | (180 | ) | (104 | ) | (50 | ) | ||||||||||
Real
estate – mortgage – residential (1-4 family) first
mortgages
|
(4,617 | ) | (1,333 | ) | (305 | ) | (382 | ) | (378 | ) | ||||||||||
Real
estate – mortgage – home equity loans / lines of credit
|
(1,824 | ) | (613 | ) | – | (24 | ) | (138 | ) | |||||||||||
Real
estate – mortgage – commercial and other
|
(516 | ) | (677 | ) | (497 | ) | – | (554 | ) | |||||||||||
Installment
loans to individuals
|
(1,973 | ) | (1,714 | ) | (1,213 | ) | (1,021 | ) | (487 | ) | ||||||||||
Total
charge-offs
|
(12,789 | ) | (5,638 | ) | (3,177 | ) | (2,017 | ) | (2,363 | ) | ||||||||||
Recoveries
of loans previously charged-off:
|
||||||||||||||||||||
Commercial,
financial, and agricultural
|
18 | 31 | 49 | 36 | 99 | |||||||||||||||
Real
estate – construction, land development & other land
loans
|
9 | – | – | – | – | |||||||||||||||
Real
estate – mortgage – residential (1-4 family) first
mortgages
|
184 | 86 | – | 44 | 112 | |||||||||||||||
Real
estate – mortgage – home equity loans / lines of credit
|
66 | 42 | 43 | 13 | – | |||||||||||||||
Real
estate – mortgage – commercial and other
|
129 | 136 | 23 | 4 | 3 | |||||||||||||||
Installment
loans to individuals
|
284 | 237 | 222 | 176 | 108 | |||||||||||||||
Total
recoveries
|
690 | 532 | 337 | 273 | 322 | |||||||||||||||
Net
charge-offs
|
(12,099 | ) | (5,106 | ) | (2,840 | ) | (1,744 | ) | (2,041 | ) | ||||||||||
Allowance
for loan losses, at end of year
|
$ | 37,343 | 29,256 | 21,324 | 18,947 | 15,716 | ||||||||||||||
Ratios:
|
||||||||||||||||||||
Net
charge-offs as a percent of average non-covered loans
|
0.56 | % | 0.24 | % | 0.16 | % | 0.11 | % | 0.14 | % | ||||||||||
Allowance
for loan losses as a percent of non-covered loans at end of
year
|
1.75 | % | 1.32 | % | 1.13 | % | 1.09 | % | 1.06 | % | ||||||||||
Allowance
for loan losses as a multiple of net charge-offs
|
3.09 | x | 5.73 | x | 7.51 | x | 10.86 | x | 7.70 | x | ||||||||||
Provision
for loan losses as a percent of net charge-offs
|
166.84 | % | 193.50 | % | 183.70 | % | 282.28 | % | 148.95 | % | ||||||||||
Recoveries
of loans previously charged-off as a percent of loans
charged-off
|
5.40 | % | 9.44 | % | 10.61 | % | 13.53 | % | 13.63 | % |
Table
15 Average
Deposits
|
Year
Ended December 31,
|
||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||
($
in thousands)
|
Average
Amount
|
Average
Rate
|
Average
Amount
|
Average
Rate
|
Average
Amount
|
Average
Rate
|
||||||||||||||||||
NOW
accounts
|
$ | 244,863 | 0.29 | % | $ | 197,459 | 0.19 | % | $ | 192,407 | 0.37 | % | ||||||||||||
Money
market accounts
|
429,068 | 1.52 | % | 309,917 | 2.36 | % | 239,258 | 3.31 | % | |||||||||||||||
Savings
accounts
|
137,142 | 1.08 | % | 124,460 | 1.65 | % | 106,357 | 1.62 | % | |||||||||||||||
Time
deposits >$100,000
|
745,159 | 2.54 | % | 532,566 | 4.00 | % | 450,801 | 5.03 | % | |||||||||||||||
Other
time deposits
|
736,358 | 2.43 | % | 586,235 | 3.79 | % | 567,572 | 4.67 | % | |||||||||||||||
Total
interest-bearing deposits
|
2,292,590 | 1.99 | % | 1,750,637 | 3.04 | % | 1,556,395 | 3.83 | % | |||||||||||||||
Noninterest-bearing
deposits
|
257,119 | - | 234,695 | - | 223,870 | - | ||||||||||||||||||
Total
deposits
|
$ | 2,549,709 | 1.79 | % | $ | 1,985,332 | 2.68 | % | $ | 1,780,265 | 3.35 | % |
Table
16 Maturities of Time Deposits of $100,000 or
More
|
As
of December 31, 2009
|
||||||||||||||||||||
($
in thousands)
|
3
Months
or
Less
|
Over
3 to 6
Months
|
Over
6 to 12
Months
|
Over
12
Months
|
Total
|
|||||||||||||||
Time
deposits of $100,000 or more
|
$ | 247,573 | 227,452 | 277,191 | 64,324 | 816,540 |
Table
17 Interest Rate Sensitivity
Analysis
|
Repricing
schedule for interest-earning assets and interest-bearing
liabilities
held as of December 31, 2009
|
||||||||||||||||||||
($
in thousands)
|
3
Months
or
Less
|
Over
3 to 12
Months
|
Total
Within
12
Months
|
Over
12
Months
|
Total
|
|||||||||||||||
Earning
assets:
|
||||||||||||||||||||
Loans,
net of deferred fees (1)
|
$ | 1,105,788 | 238,518 | 1,344,306 | 1,308,559 | 2,652,865 | ||||||||||||||
Securities
available for sale
|
22,664 | 34,044 | 56,708 | 123,047 | 179,755 | |||||||||||||||
Securities
held to maturity
|
1,997 | 1,247 | 3,244 | 31,169 | 34,413 | |||||||||||||||
Short-term
investments
|
294,768 |
─
|
294,768 |
─
|
294,768 | |||||||||||||||
Total
earning assets
|
$ | 1,425,217 | 273,809 | 1,699,026 | 1,462,775 | 3,161,801 | ||||||||||||||
Percent
of total earning assets
|
45.08 | % | 8.66 | % | 53.74 | % | 46.26 | % | 100.00 | % | ||||||||||
Cumulative
percent of total earning assets
|
45.08 | % | 53.74 | % | 53.74 | % | 100.00 | % | 100.00 | % | ||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||
NOW
deposits
|
$ | 362,366 |
─
|
362,366 |
─
|
362,366 | ||||||||||||||
Money
market deposits
|
496,940 |
─
|
496,940 |
─
|
496,940 | |||||||||||||||
Savings
deposits
|
149,338 |
─
|
149,338 |
─
|
149,338 | |||||||||||||||
Time
deposits of $100,000 or more
|
247,573 | 504,643 | 752,216 | 64,324 | 816,540 | |||||||||||||||
Other
time deposits
|
262,660 | 489,392 | 752,052 | 83,450 | 835,502 | |||||||||||||||
Securities
sold under agreements to repurchase
|
64,058 |
─
|
64,058 |
─
|
64,058 | |||||||||||||||
Borrowings
|
146,394 | 17,600 | 163,994 | 12,817 | 176,811 | |||||||||||||||
Total
interest-bearing liabilities
|
$ | 1,729,329 | 1,011,635 | 2,740,964 | 160,591 | 2,901,555 | ||||||||||||||
Percent
of total interest-bearing liabilities
|
59.60 | % | 34.87 | % | 94.47 | % | 5.53 | % | 100.00 | % | ||||||||||
Cumulative
percent of total interest- bearing liabilities
|
59.60 | % | 94.47 | % | 94.47 | % | 100.00 | % | 100.00 | % | ||||||||||
Interest
sensitivity gap
|
$ | (304,112 | ) | (737,826 | ) | (1,041,938 | ) | 1,302,184 | 260,246 | |||||||||||
Cumulative
interest sensitivity gap
|
(304,112 | ) | (1,041,938 | ) | (1,041,938 | ) | 260,246 | 260,246 | ||||||||||||
Cumulative
interest sensitivity gap as a percent of total earning
assets
|
(9.62 | %) | (32.95 | %) | (32.95 | %) | 8.23 | % | 8.23 | % | ||||||||||
Cumulative
ratio of interest-sensitive assets to interest-sensitive
liabilities
|
82.41 | % | 61.99 | % | 61.99 | % | 108.97 | % | 108.97 | % |
Table
18 Contractual Obligations and Other Commercial
Commitments
|
Payments
Due by Period
($ in
thousands
)
|
||||||||||||||||||||
Contractual
Obligations
As
of December 31, 2009
|
Total
|
On
Demand or Less
than
1 Year
|
1-3
Years
|
4-5
Years
|
After
5 Years
|
|||||||||||||||
Securities
sold under agreements to repurchase
|
$ | 64,058 | 64,058 |
─
|
─
|
─
|
||||||||||||||
Borrowings
|
176,811 | 117,600 | 12,817 |
─
|
46,394 | |||||||||||||||
Operating
leases
|
5,394 | 786 | 1,275 | 937 | 2,396 | |||||||||||||||
Total
contractual cash obligations, excluding deposits
|
246,263 | 182,444 | 14,092 | 937 | 48,790 | |||||||||||||||
Deposits
|
2,933,108 | 2,785,334 | 133,699 | 14,028 | 47 | |||||||||||||||
Total
contractual cash obligations, including deposits
|
$ | 3,179,371 | 2,967,778 | 147,791 | 14,965 | 48,837 |
Amount
of Commitment Expiration Per Period
($ in
thousands
)
|
||||||||||||||||||||
Other
Commercial
Commitments
As
of December 31, 2009
|
Total
Amounts
Committed
|
Less
than
1 Year
|
1-3
Years
|
4-5
Years
|
After
5 Years
|
|||||||||||||||
Credit
cards
|
$ | 26,958 | 13,479 | 13,479 |
─
|
─
|
||||||||||||||
Lines
of credit and loan commitments
|
288,765 | 111,704 | 12,640 | 10,983 | 153,438 | |||||||||||||||
Standby
letters of credit
|
7,646 | 7,386 | 151 | 109 |
─
|
|||||||||||||||
Total
commercial commitments
|
$ | 323,369 | 132,569 | 26,270 | 11,092 | 153,438 |
Table
19 Market Risk Sensitive
Instruments
|
Expected
Maturities of Market Sensitive Instruments Held
at
December 31, 2009 Occurring in Indicated Year
|
||||||||||||||||||||||||||||||||||||
($
in thousands)
|
2010
|
2011
|
2012
|
2013
|
2014
|
Beyond
|
Total
|
Average
Interest Rate
|
Estimated
Fair
Value
|
|||||||||||||||||||||||||||
Due
from banks, interest-bearing
|
$ | 283,175 | - | - | - | - | - | 283,175 | 0.24 | % | $ | 283,175 | ||||||||||||||||||||||||
Federal
funds sold
|
7,626 | - | - | - | - | - | 7,626 | 0.24 | % | 7,626 | ||||||||||||||||||||||||||
Presold
mortgages in process of settlement
|
3,967 | - | - | - | - | - | 3,967 | 5.00 | % | 3,967 | ||||||||||||||||||||||||||
Debt
Securities- at amortized cost (1) (2)
|
59,963 | 27,356 | 23,632 | 22,464 | 17,154 | 45,149 | 195,718 | 4.29 | % | 197,698 | ||||||||||||||||||||||||||
Loans
– fixed (3) (4)
|
270,776 | 185,082 | 274,990 | 268,817 | 104,292 | 148,255 | 1,252,212 | 6.83 | % | 1,258,315 | ||||||||||||||||||||||||||
Loans
– adjustable (3) (4)
|
476,466 | 62,841 | 78,673 | 58,939 | 44,224 | 499,553 | 1,220,696 | 5.02 | % | 1,182,360 | ||||||||||||||||||||||||||
Total
|
$ | 1,101,973 | 275,279 | 377,295 | 350,220 | 165,670 | 692,957 | 2,963,394 | 5.27 | % | $ | 2,933,141 | ||||||||||||||||||||||||
NOW
deposits
|
$ | 362,366 | - | - | - | - | - | 362,366 | 0.28 | % | $ | 362,366 | ||||||||||||||||||||||||
Money
market deposits
|
496,940 | - | - | - | - | - | 496,940 | 1.18 | % | 496,940 | ||||||||||||||||||||||||||
Savings
deposits
|
149,338 | - | - | - | - | - | 149,338 | 0.99 | % | 149,338 | ||||||||||||||||||||||||||
Time
deposits
|
1,504,268 | 108,812 | 24,887 | 8,945 | 5,083 | 47 | 1,652,042 | 2.13 | % | 1,661,473 | ||||||||||||||||||||||||||
Securities
sold under agreements to repurchase
|
64,058 | - | - | - | - | - | 64,058 | 0.86 | % | 64,058 | ||||||||||||||||||||||||||
Borrowings
– fixed (2)
|
17,600 | 1,800 | 7,500 | - | - | - | 26,900 | 4.35 | % | 27,984 | ||||||||||||||||||||||||||
Borrowings
– adjustable
|
100,000 | 3,000 | – | – | – | 46,911 | 149,911 | 0.93 | % | 113,192 | ||||||||||||||||||||||||||
Total
|
$ | 2,694,570 | 113,612 | 32,387 | 8,945 | 5,083 | 46,958 | 2,901,555 | 1.90 | % | $ | 2,875,351 |
(1)
|
Tax-exempt
securities are reflected at a tax-equivalent basis using a 39% tax
rate.
|
(2)
|
Securities
and borrowings with call dates within 12 months of December 31, 2009 that
have above market interest rates are assumed to mature at their call date
for purposes of this table. Mortgage securities are assumed to
mature in the period of their expected repayment based on estimated
prepayment speeds.
|
(3)
|
Excludes
nonaccrual loans.
|
(4)
|
Loans
are shown in the period of their contractual maturity, except for home
equity lines of credit loans which are assumed to repay on a straight-line
basis over five years.
|
Table
20 Return on Assets and Common
Equity
|
For
the Year Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Return
on assets
|
1.82 | % | 0.89 | % | 1.02 | % | ||||||
Return
on common equity
|
22.55 | % | 10.44 | % | 12.77 | % | ||||||
Dividend
payout ratio
|
9.47 | % | 55.07 | % | 50.00 | % | ||||||
Average
shareholders’ equity to average assets
|
10.11 | % | 8.49 | % | 7.99 | % | ||||||
Table
21 Risk-Based and Leverage Capital
Ratios
|
As
of December 31,
|
||||||||||||
($
in thousands)
|
2009
|
2008
|
2007
|
|||||||||
Risk-Based
and Leverage Capital
|
||||||||||||
Tier
I capital:
|
||||||||||||
Common
shareholders’ equity
|
$ | 342,383 | 219,868 | 174,070 | ||||||||
Trust
preferred securities eligible for Tier I capital treatment
|
45,000 | 45,000 | 45,000 | |||||||||
Intangible
assets
|
(70,948 | ) | (67,780 | ) | (51,020 | ) | ||||||
Accumulated
other comprehensive income adjustments
|
4,427 | 8,156 | 4,334 | |||||||||
Total
Tier I leverage capital
|
320,862 | 205,244 | 172,384 | |||||||||
Tier
II capital:
|
||||||||||||
Remaining
trust preferred securities
|
– | – | – | |||||||||
Allowable
allowance for loan losses
|
28,996 | 27,285 | 21,324 | |||||||||
Tier
II capital additions
|
28,996 | 27,285 | 21,324 | |||||||||
Total
risk-based capital
|
$ | 349,858 | 232,529 | 193,708 | ||||||||
Total
risk weighted assets
|
$ | 2,311,297 | 2,182,831 | 1,880,480 | ||||||||
Adjusted
fourth quarter average assets
|
3,449,684 | 2,534,425 | 2,154,407 | |||||||||
Risk-based
capital ratios:
|
||||||||||||
Tier
I capital to Tier I risk adjusted assets
|
13.88 | % | 9.40 | % | 9.17 | % | ||||||
Minimum
required Tier I capital
|
4.00 | % | 4.00 | % | 4.00 | % | ||||||
Total
risk-based capital to Tier II risk-adjusted assets
|
15.14 | % | 10.65 | % | 10.30 | % | ||||||
Minimum
required total risk-based capital
|
8.00 | % | 8.00 | % | 8.00 | % | ||||||
Leverage
capital ratios:
|
||||||||||||
Tier
I leverage capital to adjusted fourth quarter average
assets
|
9.30 | % | 8.10 | % | 8.00 | % | ||||||
Minimum
required Tier I leverage capital
|
4.00 | % | 4.00 | % | 4.00 | % |
Table 22 Quarterly Financial Summary (Unaudited) |
($
in thousands)
|
2009
|
2008
|
||||||
Assets
|
||||||||
Cash
and due from banks, noninterest-bearing
|
$ | 60,071 | 88,015 | |||||
Due
from banks, interest-bearing
|
283,175 | 105,191 | ||||||
Federal
funds sold
|
7,626 | 31,574 | ||||||
Total
cash and cash equivalents
|
350,872 | 224,780 | ||||||
Securities
available for sale
|
179,755 | 171,193 | ||||||
Securities
held to maturity (fair values of $34,947 in 2009 and $15,811 in
2008)
|
34,413 | 15,990 | ||||||
Presold
mortgages in process of settlement
|
3,967 | 423 | ||||||
Loans
– non-covered
|
2,132,843 | 2,211,315 | ||||||
Loans
– covered by FDIC loss share agreement
|
520,022 |
–
|
||||||
Total
loans
|
2,652,865 | 2,211,315 | ||||||
Less: Allowance
for loan losses
|
(37,343 | ) | (29,256 | ) | ||||
Net
loans
|
2,615,522 | 2,182,059 | ||||||
Premises
and equipment
|
54,159 | 52,259 | ||||||
Accrued
interest receivable
|
14,783 | 12,653 | ||||||
FDIC
loss share receivable
|
143,221 |
–
|
||||||
Goodwill
|
65,835 | 65,835 | ||||||
Other
intangible assets
|
5,113 | 1,945 | ||||||
Other
assets
|
77,716 | 23,430 | ||||||
Total
assets
|
$ | 3,545,356 | 2,750,567 | |||||
Liabilities
|
||||||||
Deposits: Demand
– noninterest-bearing
|
$ | 272,422 | 229,478 | |||||
NOW
accounts
|
362,366 | 198,775 | ||||||
Money
market accounts
|
496,940 | 340,739 | ||||||
Savings
accounts
|
149,338 | 125,240 | ||||||
Time
deposits of $100,000 or more
|
816,540 | 592,192 | ||||||
Other
time deposits
|
835,502 | 588,367 | ||||||
Total
deposits
|
2,933,108 | 2,074,791 | ||||||
Securities
sold under agreements to repurchase
|
64,058 | 61,140 | ||||||
Borrowings
|
176,811 | 367,275 | ||||||
Accrued
interest payable
|
3,054 | 5,077 | ||||||
Other
liabilities
|
25,942 | 22,416 | ||||||
Total
liabilities
|
3,202,973 | 2,530,699 | ||||||
Commitments
and contingencies (see Note 12)
|
–
|
–
|
||||||
Shareholders’
Equity
|
||||||||
Preferred
stock, no par value per share. Authorized: 5,000,000 shares,
Issued and outstanding: 65,000 in 2009 and none in
2008
|
65,000 |
–
|
||||||
Discount
on preferred stock
|
(3,789 | ) |
–
|
|||||
Common
stock, no par value per share. Authorized: 20,000,000 shares,
Issued and outstanding: 16,722,423 shares in 2009 and
16,573,826 shares in 2008
|
98,099 | 96,072 | ||||||
Common
stock warrants
|
4,592 |
–
|
||||||
Retained
earnings
|
182,908 | 131,952 | ||||||
Accumulated
other comprehensive income (loss)
|
(4,427 | ) | (8,156 | ) | ||||
Total
shareholders’ equity
|
342,383 | 219,868 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 3,545,356 | 2,750,567 |
($
in thousands, except per share data)
|
2009
|
2008
|
2007
|
|||||||||
Interest
Income
|
||||||||||||
Interest
and fees on loans
|
$ | 148,007 | 138,878 | 139,323 | ||||||||
Interest
on investment securities:
|
||||||||||||
Taxable
interest income
|
6,580 | 7,333 | 6,453 | |||||||||
Tax-exempt
interest income
|
859 | 640 | 561 | |||||||||
Other,
principally overnight investments
|
545 | 1,011 | 2,605 | |||||||||
Total
interest income
|
155,991 | 147,862 | 148,942 | |||||||||
Interest
Expense
|
||||||||||||
Savings,
NOW and money market
|
8,744 | 9,736 | 10,368 | |||||||||
Time
deposits of $100,000 or more
|
18,908 | 21,308 | 22,687 | |||||||||
Other
time deposits
|
17,866 | 22,197 | 26,498 | |||||||||
Securities
sold under agreements to repurchase
|
736 | 903 | 1,476 | |||||||||
Borrowings
|
2,641 | 7,159 | 8,629 | |||||||||
Total
interest expense
|
48,895 | 61,303 | 69,658 | |||||||||
Net
interest income
|
107,096 | 86,559 | 79,284 | |||||||||
Provision
for loan losses
|
20,186 | 9,880 | 5,217 | |||||||||
Net
interest income after provision for loan losses
|
86,910 | 76,679 | 74,067 | |||||||||
Noninterest
Income
|
||||||||||||
Service
charges on deposit accounts
|
13,854 | 13,535 | 9,988 | |||||||||
Other
service charges, commissions and fees
|
4,848 | 4,392 | 3,902 | |||||||||
Fees
from presold mortgage loans
|
1,505 | 869 | 1,135 | |||||||||
Commissions
from sales of insurance and financial products
|
1,524 | 1,552 | 1,511 | |||||||||
Data
processing fees
|
139 | 167 | 204 | |||||||||
Gain
from acquisition
|
67,894 |
–
|
–
|
|||||||||
Securities
gains (losses)
|
(104 | ) | (14 | ) | 487 | |||||||
Other
gains (losses)
|
(142 | ) | 156 | (10 | ) | |||||||
Total
noninterest income
|
89,518 | 20,657 | 17,217 | |||||||||
Noninterest
Expenses
|
||||||||||||
Salaries
|
30,745 | 28,127 | 26,227 | |||||||||
Employee
benefits
|
10,843 | 7,319 | 7,443 | |||||||||
Total
personnel expense
|
41,588 | 35,446 | 33,670 | |||||||||
Occupancy
expense
|
6,071 | 4,175 | 3,795 | |||||||||
Equipment
related expenses
|
4,334 | 4,105 | 3,809 | |||||||||
Intangibles
amortization
|
630 | 416 | 374 | |||||||||
Acquisition
expenses
|
1,343 |
–
|
–
|
|||||||||
Other
operating expenses
|
24,585 | 18,069 | 14,676 | |||||||||
Total
noninterest expenses
|
78,551 | 62,211 | 56,324 | |||||||||
Income
before income taxes
|
97,877 | 35,125 | 34,960 | |||||||||
Income
taxes
|
37,618 | 13,120 | 13,150 | |||||||||
Net
income
|
60,259 | 22,005 | 21,810 | |||||||||
Preferred
stock dividends and accretion
|
(3,972 | ) |
–
|
–
|
||||||||
Net
income available to common shareholders
|
$ | 56,287 | 22,005 | 21,810 | ||||||||
Earnings
per common share:
|
||||||||||||
Basic
|
$ | 3.38 | 1.38 | 1.52 | ||||||||
Diluted
|
3.37 | 1.37 | 1.51 | |||||||||
Dividends
declared per common share
|
$ | 0.32 | 0.76 | 0.76 | ||||||||
Weighted
average common shares outstanding:
|
||||||||||||
Basic
|
16,648,822 | 15,980,533 | 14,378,279 | |||||||||
Diluted
|
16,686,880 | 16,027,144 | 14,468,974 |
($ in
thousands
)
|
2009
|
2008
|
2007
|
|||||||||
Net
income
|
$ | 60,259 | 22,005 | 21,810 | ||||||||
Other
comprehensive income (loss):
|
||||||||||||
Unrealized
gains/losses on securities available for sale:
|
||||||||||||
Unrealized
holding gains arising during the period, pretax
|
1,455 | 173 | 1,432 | |||||||||
Tax
expense
|
(567 | ) | (67 | ) | (559 | ) | ||||||
Reclassification
to realized (gains) losses
|
104 | 14 | (487 | ) | ||||||||
Tax
expense (benefit)
|
(41 | ) | (5 | ) | 190 | |||||||
Postretirement
Plans:
|
||||||||||||
Net
gain (loss) arising during period
|
3,623 | (6,795 | ) | (1,098 | ) | |||||||
Tax
(expense) benefit
|
(1,397 | ) | 2,650 | 428 | ||||||||
Amortization
of unrecognized net actuarial loss
|
869 | 308 | 467 | |||||||||
Tax
expense
|
(339 | ) | (120 | ) | (182 | ) | ||||||
Amortization
of prior service cost and transition obligation
|
36 | 34 | 40 | |||||||||
Tax
expense
|
(14 | ) | (14 | ) | (15 | ) | ||||||
Other
comprehensive income (loss)
|
3,729 | (3,822 | ) | 216 | ||||||||
Comprehensive
income
|
$ | 63,988 | 18,183 | 22,026 |
Preferred
|
Preferred
Stock
|
Common
Stock
|
Common
Stock
|
Retained
|
Accumulated
Other
Comprehensive
|
Total
Share-
holders’
|
||||||||||||||||||||||||||
(In thousands, except share
data
)
|
Stock
|
Discount
|
Shares
|
Amount
|
Warrants
|
Earnings
|
Income
(Loss)
|
Equity
|
||||||||||||||||||||||||
Balances,
January 1, 2007
|
$ | — | — | 14,353 | $ | 56,035 | — | 111,220 | (4,550 | ) | 162,705 | |||||||||||||||||||||
Net
income
|
21,810 | 21,810 | ||||||||||||||||||||||||||||||
Cash
dividends declared ($0.76 per share)
|
(10,928 | ) | (10,928 | ) | ||||||||||||||||||||||||||||
Common
stock issued under stock option plans
|
52 | 568 | 568 | |||||||||||||||||||||||||||||
Purchases
and retirement of common stock
|
(27 | ) | (532 | ) | (532 | ) | ||||||||||||||||||||||||||
Tax
benefit realized from exercise of nonqualified stock
options
|
—
|
41 | 41 | |||||||||||||||||||||||||||||
Stock-based
compensation
|
—
|
190 | 190 | |||||||||||||||||||||||||||||
Other
comprehensive income
|
216 | 216 | ||||||||||||||||||||||||||||||
Balances,
December 31, 2007
|
— | — | 14,378 | 56,302 | — | 122,102 | (4,334 | ) | 174,070 | |||||||||||||||||||||||
Net
income
|
22,005 | 22,005 | ||||||||||||||||||||||||||||||
Cash
dividends declared ($0.76 per share)
|
(12,155 | ) | (12,155 | ) | ||||||||||||||||||||||||||||
Common
stock issued under stock option plans
|
57 | 705 | 705 | |||||||||||||||||||||||||||||
Common
stock issued into dividend reinvestment plan
|
80 | 1,252 | 1,252 | |||||||||||||||||||||||||||||
Common
stock issued in acquisition
|
2,059 | 37,605 | 37,605 | |||||||||||||||||||||||||||||
Tax
benefit realized from exercise of nonqualified stock
options
|
— | 65 | 65 | |||||||||||||||||||||||||||||
Stock-based
compensation
|
— | 143 | 143 | |||||||||||||||||||||||||||||
Other
comprehensive income
|
(3,822 | ) | (3,822 | ) | ||||||||||||||||||||||||||||
Balances,
December 31, 2008
|
— | — | 16,574 | 96,072 | — | 131,952 | (8,156 | ) | 219,868 | |||||||||||||||||||||||
Net
income
|
60,259 | 60,259 | ||||||||||||||||||||||||||||||
Preferred
stock issued
|
65,000 | (4,592 | ) | 60,408 | ||||||||||||||||||||||||||||
Common
stock warrants issued
|
4,592 | 4,592 | ||||||||||||||||||||||||||||||
Common
stock issued under stock option plans
|
42 | 393 | 393 | |||||||||||||||||||||||||||||
Common
stock issued into dividend reinvestment plan
|
77 | 1,112 | 1,112 | |||||||||||||||||||||||||||||
Cash
dividends declared ($0.32 per share)
|
(5,331 | ) | (5,331 | ) | ||||||||||||||||||||||||||||
Preferred
dividends
|
(3,169 | ) | (3,169 | ) | ||||||||||||||||||||||||||||
Accretion
of preferred stock discount
|
803 | (803 | ) | –– | ||||||||||||||||||||||||||||
Tax
benefit realized from exercise of nonqualified stock
options
|
— | 73 | 73 | |||||||||||||||||||||||||||||
Stock-based
compensation
|
29 | 449 | 449 | |||||||||||||||||||||||||||||
Other
comprehensive income
|
3,729 | 3,729 | ||||||||||||||||||||||||||||||
Balances,
December 31, 2009
|
$ | 65,000 | (3,789 | ) | 16,693 | $ | 98,099 | 4,592 | 182,908 | (4,427 | ) | 342,383 |
($
in thousands)
|
2009
|
2008
|
2007
|
|||||||||
Cash
Flows From Operating Activities
|
||||||||||||
Net
income
|
$ | 60,259 | 22,005 | 21,810 | ||||||||
Reconciliation
of net income to net cash provided by operating
activities:
|
||||||||||||
Provision
for loan losses
|
20,186 | 9,880 | 5,217 | |||||||||
Net
security premium amortization (discount accretion)
|
1,279 | (70 | ) | 67 | ||||||||
Net
purchase accounting adjustments
|
(5,648 | ) | (1,099 | ) | — | |||||||
Gain
from acquisition
|
(67,894 | ) | — | — | ||||||||
Loss
(gain) on securities available for sale
|
104 | 14 | (487 | ) | ||||||||
Other
losses (gains), primarily gain from acquisition
|
142 | (156 | ) | 10 | ||||||||
Increase
in net deferred loan costs
|
(139 | ) | (89 | ) | (118 | ) | ||||||
Depreciation
of premises and equipment
|
3,624 | 3,459 | 3,286 | |||||||||
Stock-based
compensation expense
|
449 | 143 | 190 | |||||||||
Amortization
of intangible assets
|
630 | 416 | 374 | |||||||||
Deferred
income tax expense (benefit)
|
20,061 | (1,365 | ) | (422 | ) | |||||||
Originations
of presold mortgages in process of settlement
|
(93,893 | ) | (56,088 | ) | (68,325 | ) | ||||||
Proceeds
from sales of presold mortgages in process of settlement
|
93,598 | 57,333 | 71,423 | |||||||||
Decrease
(increase) in accrued interest receivable
|
1,096 | 1,289 | (803 | ) | ||||||||
Decrease
(increase) in other assets
|
(17,755 | ) | 1,474 | 1,075 | ||||||||
Increase
(decrease) in accrued interest payable
|
(3,706 | ) | (1,236 | ) | 361 | |||||||
Increase
(decrease) in other liabilities
|
2,640 | (1,617 | ) | (3,095 | ) | |||||||
Net
cash provided by operating activities
|
15,033 | 34,293 | 30,563 | |||||||||
Cash
Flows From Investing Activities
|
||||||||||||
Purchases
of securities available for sale
|
(102,899 | ) | (159,602 | ) | (90,046 | ) | ||||||
Purchases
of securities held to maturity
|
(20,300 | ) | (1,318 | ) | (5,117 | ) | ||||||
Proceeds
from sales of securities available for sale
|
44 | 503 | 4,185 | |||||||||
Proceeds
from maturities/issuer calls of securities available for
sale
|
134,736 | 138,306 | 82,013 | |||||||||
Proceeds
from maturities/issuer calls of securities held to
maturity
|
1,799 | 2,291 | 1,577 | |||||||||
Net
decrease (increase) in loans
|
105,007 | (142,365 | ) | (159,531 | ) | |||||||
Proceeds
from FDIC loss share agreements
|
41,891 | — | — | |||||||||
Proceeds
from sales of foreclosed real estate
|
4,094 | 2,991 | 1,522 | |||||||||
Purchases
of premises and equipment
|
(5,299 | ) | (5,376 | ) | (5,786 | ) | ||||||
Net
cash received in acquisition
|
91,696 | 2,461 |
─
|
|||||||||
Net
cash provided (used) by investing activities
|
250,769 | (162,109 | ) | (171,183 | ) | |||||||
Cash
Flows From Financing Activities
|
||||||||||||
Net
increase in deposits and repurchase agreements
|
153,085 | 111,148 | 139,017 | |||||||||
Proceeds
from (repayments of) borrowings, net
|
(349,465 | ) | 84,564 | 32,381 | ||||||||
Cash
dividends paid – common stock
|
(7,145 | ) | (11,738 | ) | (10,923 | ) | ||||||
Cash
dividends paid – preferred stock
|
(2,763 | ) | — | — | ||||||||
Proceeds
from issuance of preferred stock and common stock warrants
|
65,000 | — | — | |||||||||
Proceeds
from issuance of common stock
|
1,505 | 1,957 | 568 | |||||||||
Purchases
and retirement of common stock
|
— | — | (532 | ) | ||||||||
Tax
benefit from exercise of nonqualified stock options
|
73 | 65 | 41 | |||||||||
Net
cash provided (used) by financing activities
|
(139,710 | ) | 185,996 | 160,552 | ||||||||
Increase
in Cash and Cash Equivalents
|
126,092 | 58,180 | 19,932 | |||||||||
Cash
and Cash Equivalents, Beginning of Year
|
224,780 | 166,600 | 146,668 | |||||||||
Cash
and Cash Equivalents, End of Year
|
$ | 350,872 | 224,780 | 166,600 | ||||||||
Supplemental
Disclosures of Cash Flow Information:
|
||||||||||||
Cash
paid during the period for:
|
||||||||||||
Interest
|
$ | 52,601 | 62,539 | 69,297 | ||||||||
Income
taxes
|
16,474 | 15,316 | 17,077 | |||||||||
Non-cash
investing and financing transactions:
|
||||||||||||
Foreclosed
loans transferred to other real estate
|
43,860 | 4,802 | 2,915 | |||||||||
Unrealized
gain on securities available for sale, net of taxes
|
951 | 115 | 577 | |||||||||
Common
stock issued in acquisition
|
─
|
37,605 |
─
|
For
the Years Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||||||||||||||
($
in thousands, except per share amounts)
|
Income
(Numer-ator)
|
Shares
(Denom-inator)
|
Per
Share
Amount
|
Income
(Numer-ator)
|
Shares
(Denom-inator)
|
Per
Share
Amount
|
Income
(Numer-ator)
|
Shares
(Denom-inator)
|
Per
Share
Amount
|
|||||||||||||||||||||||||||
Basic
EPS
|
||||||||||||||||||||||||||||||||||||
Net
income available to common shareholders
|
$ | 56,287 | 16,648,822 | $ | 3.38 | $ | 22,005 | 15,980,533 | $ | 1.38 | $ | 21,810 | 14,378,279 | $ | 1.52 | |||||||||||||||||||||
Effect
of dilutive securities
|
- | 38,058 | - | 46,611 | - | 90,695 | ||||||||||||||||||||||||||||||
Diluted
EPS per common share
|
$ | 56,287 | 16,686,880 | $ | 3.37 | $ | 22,005 | 16,027,144 | $ | 1.37 | $ | 21,810 | 14,468,974 | $ | 1.51 |
December
31, 2009
|
December
31, 2008
|
December
31, 2007
|
||||||||||
Unrealized
gain on securities available for sale
|
$ | 1,832 | 273 | 86 | ||||||||
Deferred
tax liability
|
(715 | ) | (106 | ) | (34 | ) | ||||||
Net
unrealized gain (loss) on securities available for sale
|
1,117 | 167 | 52 | |||||||||
Additional
pension liability
|
(9,164 | ) | (13,693 | ) | (7,240 | ) | ||||||
Deferred
tax asset
|
3,620 | 5,370 | 2,854 | |||||||||
Net
additional pension liability
|
(5,544 | ) | (8,323 | ) | (4,386 | ) | ||||||
Total
accumulated other comprehensive income (loss)
|
$ | (4,427 | ) | (8,156 | ) | (4,334 | ) |
($
in thousands)
|
As
Recorded
by
Great
Pee Dee
|
Fair
Value
Adjustments
|
As
Recorded
by
the
Company
|
|||||||||
Assets
|
||||||||||||
Cash
and cash equivalents
|
$ | 3,242 | – | 3,242 | ||||||||
Securities
|
15,364 | – | 15,364 | |||||||||
Loans,
gross
|
187,309 | 1,226 | (a) | 183,840 | ||||||||
(4,695 | ) (b) | |||||||||||
Allowance
for loan losses
|
(2,353 | ) | (805 | ) (c) | (3,158 | ) | ||||||
Premises
and equipment
|
5,060 | (708 | ) (d) | 4,352 | ||||||||
Core
deposit intangible
|
355 | 492 | (e) | 847 | ||||||||
Other
|
4,285 | 2,690 | (f) | 6,975 | ||||||||
Total
|
213,262 | (1,800 | ) | 211,462 | ||||||||
Liabilities
|
||||||||||||
Deposits
|
$ | 146,611 | 1,098 | (g) | 147,709 | |||||||
Borrowings
|
39,337 | 1,328 | (h) | 40,665 | ||||||||
Other
|
1,058 | – | 1,058 | |||||||||
Total
|
187,006 | 2,426 | 189,432 | |||||||||
Net
identifiable assets acquired
|
22,030 | |||||||||||
Total
cost of acquisition
|
||||||||||||
Value
of stock issued
|
$ | 37,022 | ||||||||||
Value
of assumed options
|
587 | |||||||||||
Direct
costs of acquisition
|
751 | |||||||||||
Total
cost of acquisition
|
38,360 | |||||||||||
Goodwill
recorded related to acquisition of Great Pee Dee Bancorp
|
$ | 16,330 |
|
(a)
|
This
fair value adjustment was recorded because the yields on the loans
purchased from Great Pee Dee exceeded the market rates as of the
acquisition date. This amount is being amortized to reduce
interest income over the remaining lives of the related loans, which had a
weighted average life of approximately 6.3 years on the acquisition
date.
|
|
(b)
|
This
fair value adjustment was recorded to write-down impaired loans assumed in
the acquisition to their estimated fair market
value.
|
|
(c)
|
This
fair value adjustment was the estimated amount of additional inherent loan
losses associated with non-impaired
loans.
|
|
(d)
|
This
fair value adjustment represents the amount necessary to reduce premises
and equipment from its book value on the date of acquisition to its
estimated fair market value.
|
|
(e)
|
This
fair value adjustment represents the value of the core deposit base
assumed in the acquisition based on a study performed by an independent
consulting firm. This amount was recorded by the Company as an
identifiable intangible asset and is being amortized as expense on a
straight-line basis over the weighted average life of the core deposit
base, which was estimated to be 7.4 years on the acquisition
date.
|
|
(f)
|
This
fair value adjustment represents the net deferred tax asset associated
with the other fair value adjustments made to record the
transaction.
|
|
(g)
|
This
fair value adjustment was recorded because the weighted average interest
rate of Great Pee Dee’s time deposits exceeded the cost of similar
wholesale funding at the time of the acquisition. This
amount
|
|
(h)
|
This
fair value adjustment was recorded because the interest rates of Great Pee
Dee’s fixed rate borrowings exceeded market interest rates on similar
borrowings as of the acquisition date. This amount is being
amortized to reduce interest expense over the remaining lives of the
related borrowings, which ranged from 28 months to 48 months on the
acquisition date.
|
($
in thousands)
|
Year
Ended
December
31, 2009
|
Year
Ended
December
31, 2008
|
||||||
Interest
income – reduced by premium amortization on loans
|
$ | (196 | ) | $ | (147 | ) | ||
Interest
expense – reduced by premium amortization of deposits
|
(200 | ) | (898 | ) | ||||
Interest
expense – reduced by premium amortization of borrowings
|
(464 | ) | (347 | ) | ||||
Impact
on net interest income
|
468 | 1,098 | ||||||
Amortization
of core deposit intangible
|
114 | 86 | ||||||
Total
effect on income before income taxes
|
354 | 1,012 | ||||||
Income
taxes
|
138 | 395 | ||||||
Total
effect on net income of Great Pee Dee purchase accounting
adjustments
|
$ | 216 | $ | 617 |
($
in thousands, except share data)
|
Year
Ended
December
31, 2008
|
Year
Ended
December
31, 2007
|
||||||
Net
interest income
|
$ | 88,487 | 87,317 | |||||
Noninterest
income
|
21,336 | 19,612 | ||||||
Total
revenue
|
109,823 | 106,929 | ||||||
Provision
for loan losses
|
10,230 | 5,444 | ||||||
Noninterest
expense
|
66,646 | 62,966 | ||||||
Income
before income taxes
|
32,947 | 38,519 | ||||||
Income
tax expense
|
12,545 | 14,660 | ||||||
Net
income
|
20,402 | 23,859 | ||||||
Earnings
per share
|
||||||||
Basic
|
1.24 | 1.45 | ||||||
Diluted
|
1.23 | 1.44 |
($
in thousands)
|
As
Recorded
by
Cooperative
Bank
|
Fair
Value
Adjustments
|
As
Recorded
by
the
Company
|
|||||||||
Assets
|
||||||||||||
Cash
and cash equivalents
|
$ | 66,096 | – | 66,096 | ||||||||
Securities
|
40,189 | – | 40,189 | |||||||||
Presold
mortgages
|
3,249 | – | 3,249 | |||||||||
Loans
|
828,958 | (227,854 | ) (a) | 601,104 | ||||||||
Core
deposit intangible
|
− | 3,798 | (b) | 3,798 | ||||||||
FDIC
loss share receivable
|
− | 185,112 | (c) | 185,112 | ||||||||
Foreclosed
properties
|
15,993 | (3,534 | ) (d) | 12,459 | ||||||||
Other
assets
|
4,178 | (137 | ) (e) | 4,041 | ||||||||
Total
|
958,663 | (42,615 | ) | 916,048 | ||||||||
Liabilities
|
||||||||||||
Deposits
|
$ | 706,139 | 5,922 | (f) | 712,061 | |||||||
Borrowings
|
153,056 | 6,409 | (g) | 159,465 | ||||||||
Other
|
2,227 | 160 | (e) | 2,387 | ||||||||
Total
|
861,422 | 12,491 | 873,913 | |||||||||
Excess
of assets received over liabilities
|
97,241 | (55,106 | ) | 42,135 | ||||||||
Less: Asset
discount
|
(123,000 | ) | ||||||||||
Cash
received from FDIC at closing
|
25,759 | 25,759 | ||||||||||
Total
gain recorded
|
$ | 67,894 |
|
(a)
|
This
estimated fair value adjustment is necessary as of the acquisition date to
write down Cooperative Bank’s book value of loans to the estimated fair
value as a result of future expected loan
losses.
|
|
(b)
|
This
estimated fair value adjustment represents the value of the core deposit
base assumed in the acquisition based on a study performed by an
independent consulting firm. This amount was recorded by the
Company as an identifiable intangible asset and will be amortized as an
expense on a straight-line basis over the average life of the core deposit
base, which is estimated to be 8
years.
|
|
(c)
|
This
estimated fair value adjustment represents the amount that the Company
will receive from the FDIC under its loss share agreements as a result of
future loan losses.
|
|
(d)
|
This
estimated fair value adjustment is necessary to write down Cooperative
Bank’s book value of foreclosed real estate properties to their estimated
fair value as of the acquisition
date.
|
|
(e)
|
These
estimated fair value adjustments are other immaterial adjustments made to
acquired assets and assumed liabilities to reflect fair
value.
|
|
(f)
|
This
estimated fair value adjustment was recorded because the weighted average
interest rate of Cooperative Bank’s time deposits exceeded the cost of
similar wholesale funding at the time of the acquisition. This
amount will be amortized to reduce interest expense on a declining basis
over the average life of the portfolio of approximately 15
months.
|
|
(g)
|
This
estimated fair value adjustment was recorded because the interest rates of
Cooperative Bank’s fixed rate borrowings exceeded current interest rates
on similar borrowings. This amount was realized shortly after
the acquisition by prepaying the borrowings at a premium, and thus there
will be no future amortization related to this
adjustment.
|
($
in thousands)
|
Year
Ended
December
31, 2009
|
|||
Interest
income – increased by accretion of loan discount
|
$ | 1,469 | ||
Interest
expense – reduced by premium amortization of deposits
|
(3,711 | ) | ||
Impact
on net interest income
|
5,180 | |||
Amortization
of core deposit intangible
|
237 | |||
Total
effect on income before income taxes
|
4,943 | |||
Income
taxes
|
1,952 | |||
Total
effect on net income of Cooperative Bank purchase accounting
adjustments
|
$ | 2,991 |
2009
|
2008
|
|||||||||||||||||||||||||||||||
Amortized
|
Fair
|
Unrealized
|
Amortized
|
Fair
|
Unrealized
|
|||||||||||||||||||||||||||
(In
thousands)
|
Cost
|
Value
|
Gains
|
(Losses)
|
Cost
|
Value
|
Gains
|
(Losses)
|
||||||||||||||||||||||||
Securities
available for sale:
|
||||||||||||||||||||||||||||||||
Government-sponsored
enterprise securities
|
$ | 36,106 | 36,518 | 412 |
─
|
88,951 | 90,424 | 1,473 |
─
|
|||||||||||||||||||||||
Mortgage-backed
securities
|
109,430 | 111,797 | 2,423 | (56 | ) | 46,340 | 46,962 | 779 | (157 | ) | ||||||||||||||||||||||
Corporate
bonds
|
15,769 | 14,436 |
─
|
(1,333 | ) | 18,885 | 16,848 | 380 | (2,417 | ) | ||||||||||||||||||||||
Equity
securities
|
16,618 | 17,004 | 417 | (31 | ) | 16,744 | 16,959 | 280 | (65 | ) | ||||||||||||||||||||||
Total
available for sale
|
$ | 177,923 | 179,755 | 3,252 | (1,420 | ) | $ | 170,920 | 171,193 | 2,912 | (2,639 | ) | ||||||||||||||||||||
Securities
held to maturity:
|
||||||||||||||||||||||||||||||||
State
and local governments
|
$ | 34,394 | 34,928 | 612 | (78 | ) | 15,967 | 15,788 | 109 | (288 | ) | |||||||||||||||||||||
Other
|
19 | 19 |
─
|
─
|
23 | 23 |
─
|
─
|
||||||||||||||||||||||||
Total
held to maturity
|
$ | 34,413 | 34,947 | 612 | (78 | ) | 15,990 | 15,811 | 109 | (288 | ) |
Securities
in an Unrealized Loss Position for
Less
than 12 Months
|
Securities
in an Unrealized Loss Position for
More
than 12 Months
|
Total
|
||||||||||||||||||||||
(in
thousands)
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
Government-sponsored
enterprise securities
|
$ | – | – | – | – | – | – | |||||||||||||||||
Mortgage-backed
securities
|
9,575 | 56 | – | – | 9,575 | 56 | ||||||||||||||||||
Corporate
bonds
|
1,609 | 224 | 12,827 | 1,109 | 14,436 | 1,333 | ||||||||||||||||||
Equity
securities
|
17 | 10 | 27 | 21 | 44 | 31 | ||||||||||||||||||
State
and local governments
|
5,821 | 77 | 230 | 1 | 6,051 | 78 | ||||||||||||||||||
Total
temporarily impaired securities
|
$ | 17,022 | 367 | 13,084 | 1,131 | 30,106 | 1,498 |
(in
thousands)
|
Securities
in an Unrealized Loss Position for
Less
than 12 Months
|
Securities
in an Unrealized Loss Position for
More
than 12 Months
|
Total
|
|||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
Government-sponsored
enterprise securities
|
$ | – | – | – | – | – | – | |||||||||||||||||
Mortgage-backed
securities
|
3,468 | 27 | 5,430 | 130 | 8,898 | 157 | ||||||||||||||||||
Corporate
bonds
|
8,543 | 2,165 | 2,847 | 252 | 11,390 | 2,417 | ||||||||||||||||||
Equity
securities
|
29 | 14 | 49 | 51 | 78 | 65 | ||||||||||||||||||
State
and local governments
|
8,737 | 288 | – | – | 8,737 | 288 | ||||||||||||||||||
Total
temporarily impaired securities
|
$ | 20,777 | 2,494 | 8,326 | 433 | 29,103 | 2,927 |
($ in
thousands
)
|
S&P
Issuer
|
Maturity
|
Amortized
|
||||||||||
Issuer
|
Ratings
(1)
|
Date
|
Cost
|
Market
Value
|
|||||||||
First
Citizens Bancorp (South Carolina) Bond
|
BB
|
4/1/15
|
$ | 2,994 | 2,859 | ||||||||
Bank
of America Trust Preferred Security
|
BB
|
12/11/26
|
2,053 | 1,918 | |||||||||
Wells
Fargo Trust Preferred Security
|
A- |
1/15/27
|
2,567 | 2,428 | |||||||||
Bank
of America Trust Preferred Security
|
BB
|
4/15/27
|
5,063 | 4,831 | |||||||||
First
Citizens Bancorp (North Carolina) Trust Preferred Security
|
BB
|
3/1/28
|
2,092 | 1,811 | |||||||||
First
Citizens Bancorp (South Carolina) Trust Preferred Security
|
Not
Rated
|
6/15/34
|
1,000 | 589 | |||||||||
Total
investment in corporate bonds
|
$ | 15,769 | 14,436 |
Securities
Available for Sale
|
Securities
Held to Maturity
|
|||||||||||||||
(In
thousands)
|
Amortized
Cost |
Fair
Value |
Amortized
Cost |
Fair
Value |
||||||||||||
Debt
securities
|
||||||||||||||||
Due
within one year
|
$ | 33,068 | 33,263 | $ | 3,244 | 3,267 | ||||||||||
Due
after one year but within five years
|
3,038 | 3,255 | 3,168 | 3,261 | ||||||||||||
Due
after five years but within ten years
|
2,994 | 2,859 | 24,469 | 24,936 | ||||||||||||
Due
after ten years
|
12,775 | 11,577 | 3,532 | 3,483 | ||||||||||||
Mortgage-backed
securities
|
109,430 | 111,797 |
─
|
─
|
||||||||||||
Total
debt securities
|
161,305 | 162,751 | 34,413 | 34,947 | ||||||||||||
Equity
securities
|
16,618 | 17,004 |
─
|
─
|
||||||||||||
Total
securities
|
$ | 177,923 | 179,755 | $ | 34,413 | 34,947 |
($
in thousands)
|
December
31, 2009
|
December
31, 2008
|
||||||||||||||
Amount
|
Percentage
|
Amount
|
Percentage
|
|||||||||||||
All loans (non-covered and
covered):
|
||||||||||||||||
Commercial,
financial, and agricultural
|
$ | 173,611 | 7 | % | 190,428 | 9 | % | |||||||||
Real
estate – construction, land development & other land
loans
|
551,714 | 21 | % | 481,849 | 22 | % | ||||||||||
Real
estate – mortgage – residential (1-4 family) first
mortgages
|
849,875 | 32 | % | 576,884 | 26 | % | ||||||||||
Real
estate – mortgage – home equity loans / lines of credit
|
270,054 | 10 | % | 249,764 | 11 | % | ||||||||||
Real
estate – mortgage – commercial and other
|
718,723 | 27 | % | 620,444 | 28 | % | ||||||||||
Installment
loans to individuals
|
88,514 | 3 | % | 91,711 | 4 | % | ||||||||||
Subtotal
|
2,652,491 | 100 | % | 2,211,080 | 100 | % | ||||||||||
Unamortized
net deferred loan costs
|
374 | 235 | ||||||||||||||
Total
loans
|
$ | 2,652,865 | 2,211,315 |
($
in thousands)
|
December
31, 2009
|
December
31, 2008
|
||||||||||||||
Amount
|
Percentage
|
Amount
|
Percentage
|
|||||||||||||
Non-covered loans:
|
||||||||||||||||
Commercial,
financial, and agricultural
|
$ | 164,225 | 8 | % | 190,428 | 9 | % | |||||||||
Real
estate – construction, land development & other land
loans
|
408,458 | 19 | % | 481,849 | 22 | % | ||||||||||
Real
estate – mortgage – residential (1-4 family) first
mortgages
|
594,470 | 28 | % | 576,884 | 26 | % | ||||||||||
Real
estate – mortgage – home equity loans / lines of credit
|
247,995 | 11 | % | 249,764 | 11 | % | ||||||||||
Real
estate – mortgage – commercial and other
|
632,985 | 30 | % | 620,444 | 28 | % | ||||||||||
Installment
loans to individuals
|
84,336 | 4 | % | 91,711 | 4 | % | ||||||||||
Subtotal
|
2,132,469 | 100 | % | 2,211,080 | 100 | % | ||||||||||
Unamortized
net deferred loan costs
|
374 | 235 | ||||||||||||||
Total
non-covered loans
|
$ | 2,132,843 | 2,211,315 |
($
in thousands)
|
Impaired
Purchased
Loans
|
Nonimpaired
Purchased
Loans
|
Total
Covered
Loans
|
Unpaid
Principal Balance
|
||||||||||||
Covered loans:
|
||||||||||||||||
Commercial,
financial, and agricultural
|
$ | − | 9,386 | 9,386 | 12,406 | |||||||||||
Real
estate – construction, land development & other land
loans
|
29,479 | 113,777 | 143,256 | 254,897 | ||||||||||||
Real
estate – mortgage – residential (1-4 family) first
mortgages
|
− | 255,405 | 255,405 | 329,141 | ||||||||||||
Real
estate – mortgage – home equity loans / lines of credit
|
− | 22,059 | 22,059 | 24,504 | ||||||||||||
Real
estate – mortgage – commercial and other
|
4,971 | 80,767 | 85,738 | 108,908 | ||||||||||||
Installment
loans to individuals
|
− | 4,178 | 4,178 | 4,673 | ||||||||||||
Total
|
$ | 34,450 | 485,572 | 520,022 | 734,529 |
($
in thousands)
|
||||
Contractual
loan principal payments receivable
|
$ | 738,182 | ||
Estimate
of contractual principal not expected to be collected – loan
discount
|
(194,460 | ) | ||
Fair
value of purchased nonimpaired loans at June 19, 2009
|
543,722 | |||
Principal
repayments
|
(45,670 | ) | ||
Transfers
to foreclosed real estate
|
(13,949 | ) | ||
Accretion
of loan discount
|
1,469 | |||
Carrying amount of nonimpaired Cooperative Bank loans at December 31, 2009 | $ | 485,572 |
($
in thousands)
|
||||
Contractually
required principal payments receivable
|
$ | 90,776 | ||
Nonaccretable
difference
|
(33,394 | ) | ||
Present
value of cash flows expected to be collected
|
57,382 | |||
Accretable
difference
|
− | |||
Fair
value of purchased impaired loans at June 19, 2009
|
57,382 | |||
Transfer
to foreclosed real estate
|
(22,932 | ) | ||
Carrying
amount of impaired Cooperative Bank loans at December 31,
2009
|
$ | 34,450 |
($
in thousands)
ASC
310-30 Loans
|
Contractual
Principal Receivable
|
Fair
Market Value Adjustment – Write Down (Nonaccretable
Difference)
|
Carrying
Amount
|
|||||||||
As
of April 1, 2008 Great Pee Dee acquisition date
|
$ | 7,663 | 4,695 | 2,968 | ||||||||
Additions
due to borrower advances
|
663 | − | 663 | |||||||||
Change
due to payments received
|
(510 | ) | − | (510 | ) | |||||||
Change
due to legal discharge of debt
|
(102 | ) | (102 | ) | − | |||||||
Balance
at December 31, 2008
|
7,714 | 4,593 | 3,121 | |||||||||
Additions
due to acquisition of Cooperative Bank
|
90,776 | 33,394 | 57,382 | |||||||||
Change
due to payments received
|
(822 | ) | (150 | ) | (672 | ) | ||||||
Transfer
to foreclosed real estate
|
(31,102 | ) | (7,817 | ) | (23,285 | ) | ||||||
Change
due to loan charge-off
|
(27,273 | ) | (26,778 | ) | (495 | ) | ||||||
Balance
at December 31, 2009
|
$ | 39,293 | 3,242 | 36,051 |
ASSET QUALITY DATA
($ in
thousands
)
|
December
31, 2009
|
December
31,
2008
|
||||||
Nonaccrual
loans – non-covered
|
$ | 62,206 | 26,600 | |||||
Nonaccrual
loans – covered by FDIC loss share (1)
|
117,916 | – | ||||||
Restructured
loans – non-covered
|
21,283 | 3,995 | ||||||
Accruing
loans > 90 days past due
|
– | – | ||||||
Total
nonperforming loans
|
201,405 | 30,595 | ||||||
Other
real estate – non-covered
|
8,793 | 4,832 | ||||||
Other
real estate – covered by FDIC loss share
|
47,430 | – | ||||||
Total
nonperforming assets
|
$ | 257,628 | 35,427 | |||||
Total
nonperforming assets – non-covered
|
$ | 92,282 | 35,427 |
(1) At December
31, 2009, the contractual balance of the nonaccrual loans covered by FDIC
loss share agreements was $192.1
million.
|
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Balance,
beginning of year
|
$ | 29,256 | 21,324 | 18,947 | ||||||||
Provision
for loan losses
|
20,186 | 9,880 | 5,217 | |||||||||
Recoveries
of loans charged-off
|
690 | 532 | 337 | |||||||||
Loans
charged-off
|
(12,789 | ) | (5,638 | ) | (3,177 | ) | ||||||
Allowance
recorded related to loans assumed in corporate
acquisitions
|
– | 3,158 |
─
|
|||||||||
Balance,
end of year
|
$ | 37,343 | 29,256 | 21,324 |
($
in thousands)
|
As
of /for the year ended December 31,
2009
|
As
of /for the year ended
December
31,
2008
|
As
of /for the year ended
December
31,
2007
|
|||||||||
Impaired
loans at period end
|
||||||||||||
Non-covered
(1)
|
$ | 55,574 | 22,146 | 3,883 | ||||||||
Covered
|
94,746 | − | − | |||||||||
Total
impaired loans at period end
|
$ | 150,320 | 22,146 | 3,883 | ||||||||
Average
amount of impaired loans for period
|
||||||||||||
Non-covered
|
$ | 36,171 | 12,547 | 3,161 | ||||||||
Covered
|
34,161 | − | − | |||||||||
Average
amount of impaired loans for period – total
|
$ | 70,332 | 12,547 | 3,161 | ||||||||
Allowance
for loan losses related to impaired loans at period end
(2)
|
$ | 9,717 | 2,869 | 751 | ||||||||
Amount
of impaired loans with no related allowance at period end
|
||||||||||||
Non-covered
|
$ | 30,236 | 14,609 | 1,982 | ||||||||
Covered
|
94,746 | − | − | |||||||||
Total
impaired loans with no related allowance at period end
|
$ | 124,982 | 14,609 | 1,982 | ||||||||
(In
thousands)
|
2009
|
2008
|
||||||
Land
|
$ | 15,747 | 14,747 | |||||
Buildings
|
41,185 | 39,344 | ||||||
Furniture
and equipment
|
28,435 | 25,878 | ||||||
Leasehold
improvements
|
1,305 | 1,352 | ||||||
Total
cost
|
86,672 | 81,321 | ||||||
Less
accumulated depreciation and amortization
|
(32,513 | ) | (29,062 | ) | ||||
Net
book value of premises and equipment
|
$ | 54,159 | 52,259 |
December
31, 2009
|
December
31, 2008
|
|||||||||||||||
(In
thousands)
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
||||||||||||
Amortized
intangible assets:
|
||||||||||||||||
Customer
lists
|
$ | 394 | 241 | 394 | 210 | |||||||||||
Core
deposit premiums
|
7,590 | 2,630 | 3,792 | 2,031 | ||||||||||||
Total
|
$ | 7,984 | 2,871 | 4,186 | 2,241 | |||||||||||
Unamortized
intangible assets:
|
||||||||||||||||
Goodwill
|
$ | 65,835 | 65,835 |
(In
thousands)
|
Estimated
Amortization
Expense
|
|||
2010
|
$ | 851 | ||
2011
|
836 | |||
2012
|
824 | |||
2013
|
714 | |||
2014
|
610 | |||
Thereafter
|
1,278 | |||
Total
|
$ | 5,113 |
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Allocated
to net income
|
$ | 37,618 | 13,120 | 13,150 | ||||||||
Allocated
to stockholders’ equity, for unrealized holding gain/loss on
debt
and equity securities for financial reporting purposes
|
610 | 72 | 369 | |||||||||
Allocated
to stockholders’ equity, for tax benefit of pension
liabilities
|
1,750 | (2,516 | ) | (231 | ) | |||||||
Total
income taxes
|
$ | 39,978 | 10,676 | 13,288 |
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Current -
Federal
|
$ | 11,190 | 11,978 | 11,625 | ||||||||
- State
|
1,830 | 1,962 | 1,938 | |||||||||
Deferred
- Federal
|
20,545 | (703 | ) | (348 | ) | |||||||
-
State
|
4,053 | (117 | ) | (65 | ) | |||||||
Total
|
$ | 37,618 | 13,120 | 13,150 |
(In
thousands)
|
2009
|
2008
|
||||||
Deferred
tax assets:
|
||||||||
Allowance
for loan losses
|
$ | 15,518 | 13,304 | |||||
Estimated
loss on acquired assets
|
59,724 |
─
|
||||||
Excess
book over tax SERP retirement plan cost
|
1,844 | 1,525 | ||||||
Deferred
compensation
|
234 | 327 | ||||||
State
net operating loss carryforwards
|
213 | 219 | ||||||
Accruals,
book versus tax
|
414 | 258 | ||||||
Pension
liability adjustments
|
3,620 | 5,370 | ||||||
All
other
|
2,251 | 730 | ||||||
Gross
deferred tax assets
|
83,818 | 21,733 | ||||||
Less:
Valuation allowance
|
(230 | ) | (219 | ) | ||||
Net
deferred tax assets
|
83,588 | 21,514 | ||||||
Deferred
tax liabilities:
|
||||||||
Loan
fees
|
(857 | ) | (1,150 | ) | ||||
Excess
tax over book pension cost
|
─
|
(502 | ) | |||||
Depreciable
basis of fixed assets
|
(1,733 | ) | (1,561 | ) | ||||
Amortizable
basis of intangible assets
|
(7,938 | ) | (5,656 | ) | ||||
Unrealized
gain on securities available for sale
|
(716 | ) | (106 | ) | ||||
FHLB
stock dividends
|
(436 | ) | (436 | ) | ||||
Section
597 deferred gain
|
(10,038 | ) |
─
|
|||||
Loan
basis differences
|
(20,391 | ) |
─
|
|||||
FDIC
Loss Share Receivable
|
(56,165 | ) |
─
|
|||||
All
other
|
(173 | ) | (4 | ) | ||||
Gross
deferred tax liabilities
|
(98,447 | ) | (9,415 | ) | ||||
Net
deferred tax asset (liability) - included in other assets
|
$ | (14,859 | ) | 12,099 |
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Tax
provision at statutory rate
|
$ | 34,257 | 12,294 | 12,235 | ||||||||
Increase
(decrease) in income taxes resulting from:
|
||||||||||||
Tax-exempt
interest income
|
(459 | ) | (376 | ) | (321 | ) | ||||||
Low
income housing tax credits
|
(114 | ) | (114 | ) | (114 | ) | ||||||
Non-deductible
interest expense
|
38 | 42 | 45 | |||||||||
State
income taxes, net of federal benefit
|
3,824 | 1,199 | 1,218 | |||||||||
Change
in valuation allowance
|
3 | 3 | (15 | ) | ||||||||
Other,
net
|
69 | 72 | 102 | |||||||||
Total
|
$ | 37,618 | 13,120 | 13,150 |
(In
thousands)
|
||||
2010
|
$ | 1,504,268 | ||
2011
|
108,812 | |||
2012
|
24,887 | |||
2013
|
8,945 | |||
2014
|
5,083 | |||
Thereafter
|
47 | |||
$ | 1,652,042 |
($
in thousands)
|
2009
|
2008
|
||||||
Balance
at December 31
|
$ | 64,058 | $ | 61,140 | ||||
Weighted
average interest rate at December 31
|
0.86 | % | 1.82 | % | ||||
Maximum
amount outstanding at any month-end during the year
|
$ | 64,058 | $ | 61,140 | ||||
Average
daily balance outstanding during the year
|
$ | 53,537 | $ | 42,097 | ||||
Average
annual interest rate paid during the year
|
1.38 | % | 2.15 | % |
Description
- 2009
|
Due
date
|
Call
Feature
|
2009
Amount
|
Interest Rate
|
|||||
FHLB
Overnight Borrowings
|
1/1/10,
renewable daily
|
None
|
$ | 100,000,000 |
0.36%
subject to
change
daily
|
||||
FHLB
Term Note
|
8/10/10
|
Quarterly
by FHLB, beginning 8/11/08
|
5,600,000 |
4.46%
fixed
|
|||||
FHLB
Term Note
|
8/16/10
|
Quarterly
by FHLB, beginning 8/18/08
|
5,000,000 |
4.41%
fixed
|
|||||
FHLB
Term Note
|
9/13/10
|
Quarterly
by FHLB, beginning 9/15/08
|
7,000,000 |
4.07%
fixed
|
|||||
FHLB
Term Note
|
8/1/11
|
None
|
3,000,000 |
0.28%
at 12/31/09
Adjustable
rate based on 3 month LIBOR
|
|||||
FHLB
Term Note
|
12/12/11
|
Quarterly
by FHLB, beginning 6/12/08
|
1,800,000 |
4.21%
fixed
|
|||||
FHLB
Term Note
|
4/20/12
|
Quarterly
by FHLB, beginning 4/20/09
|
7,500,000 |
4.51%
fixed
|
|||||
Trust
Preferred Securities
|
1/23/34
|
Quarterly
by Company
beginning
1/23/09
|
20,620,000 |
2.98%
at 12/31/09
adjustable
rate
3
month LIBOR + 2.70%
|
|||||
Trust
Preferred Securities
|
6/15/36
|
Quarterly
by Company
beginning
6/15/11
|
25,774,000 |
1.64%
at 12/31/09
adjustable
rate
3
month LIBOR + 1.39%
|
|||||
Total
borrowings/ weighted average rate
|
176,294,000 |
1.46%
(2.90% excluding overnight borrowings)
|
|||||||
Unamortized
fair market value adjustment recorded in acquisition of Great Pee
Dee
|
517,000 | ||||||||
Total
borrowings as of December 31, 2009
|
$ | 176,811,000 |
(In
thousands)
|
||||
Year
ending December 31:
|
||||
2010
|
$ | 786 | ||
2011
|
677 | |||
2012
|
598 | |||
2013
|
496 | |||
2014
|
441 | |||
Later
years
|
2,396 | |||
Total
|
$ | 5,394 |
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Change in benefit
obligation
|
||||||||||||
Projected
benefit obligation at beginning of year
|
$ | 24,039 | 20,953 | 17,774 | ||||||||
Service
cost
|
1,687 | 1,453 | 1,490 | |||||||||
Interest
cost
|
1,360 | 1,231 | 1,117 | |||||||||
Actuarial
(gain) loss
|
(1,309 | ) | 765 | 855 | ||||||||
Benefits
paid
|
(382 | ) | (363 | ) | (283 | ) | ||||||
Projected
benefit obligation at end of year
|
25,395 | 24,039 | 20,953 | |||||||||
Change in plan assets
|
||||||||||||
Plan
assets at beginning of year
|
13,065 | 16,697 | 14,209 | |||||||||
Actual
return on plan assets
|
3,610 | (4,669 | ) | 1,070 | ||||||||
Employer
contributions
|
1,500 | 1,400 | 1,700 | |||||||||
Benefits
paid
|
(382 | ) | (363 | ) | (283 | ) | ||||||
Other
|
– | – | 1 | |||||||||
Plan
assets at end of year
|
17,793 | 13,065 | 16,697 | |||||||||
Funded
status at end of year
|
$ | (7,602 | ) | (10,974 | ) | (4,256 | ) |
(In
thousands)
|
2009
|
2008
|
||||||
Other
assets – prepaid pension asset
|
$ | 65 | 1,394 | |||||
Other
liabilities
|
(7,667 | ) | (12,368 | ) | ||||
$ | (7,602 | ) | (10,974 | ) |
(In
thousands)
|
2009
|
2008
|
||||||
Net
(gain)/loss
|
$ | 7,562 | 12,247 | |||||
Net
transition obligation
|
36 | 39 | ||||||
Prior
service cost
|
69 | 82 | ||||||
Amount
recognized in AOCI before tax effect
|
7,667 | 12,368 | ||||||
Tax
benefit
|
(3,028 | ) | (4,850 | ) | ||||
Net
amount recognized as reduction to AOCI
|
$ | 4,639 | 7,518 |
(In
thousands)
|
2009
|
2008
|
||||||
Prepaid
pension cost as of beginning of fiscal year
|
$ | 1,394 | 1,502 | |||||
Net
periodic pension cost for fiscal year
|
(2,829 | ) | (1,508 | ) | ||||
Actual
employer contributions
|
1,500 | 1,400 | ||||||
Prepaid
pension asset as of end of fiscal year
|
$ | 65 | 1,394 |
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Service
cost – benefits earned during the period
|
$ | 1,687 | 1,453 | 1,490 | ||||||||
Interest
cost on projected benefit obligation
|
1,360 | 1,231 | 1,117 | |||||||||
Expected
return on plan assets
|
(998 | ) | (1,446 | ) | (1,304 | ) | ||||||
Net
amortization and deferral
|
780 | 270 | 392 | |||||||||
Net
periodic pension cost
|
$ | 2,829 | 1,508 | 1,695 |
(In
thousands)
|
Estimated
benefit payments
|
|||
Year
ending December 31, 2010
|
$ | 422 | ||
Year
ending December 31, 2011
|
510 | |||
Year
ending December 31, 2012
|
629 | |||
Year
ending December 31, 2013
|
798 | |||
Year
ending December 31, 2014
|
1,001 | |||
Years
ending December 31, 2015-2019
|
7,511 |
Investment
type
|
Targeted
%
of
Total Assets
|
Acceptable
Range % of Total Assets
|
||||||
Fixed income investments
|
||||||||
Cash/money
market account
|
2 | % | 1%-5 | % | ||||
US
government bond fund
|
10 | % | 10%-20 | % | ||||
US
corporate bond fund
|
10 | % | 5%-15 | % | ||||
US
corporate high yield bond fund
|
5 | % | 0%-10 | % | ||||
Equity investments
|
||||||||
Large
cap value fund
|
20 | % | 20%-30 | % | ||||
Large
cap growth fund
|
20 | % | 20%-30 | % | ||||
Mid/small
cap growth fund
|
18 | % | 15%-25 | % | ||||
Foreign
equity fund
|
10 | % | 5%-15 | % | ||||
Company
stock
|
5 | % | 0%-10 | % |
($
in thousands)
|
||||||||||||||||
Total
Fair Value at December 31, 2009
|
Quoted
Prices in Active Markets for Identical Assets (Level
1)
|
Significant
Other Observable Inputs (Level 2)
|
Significant
Unobservable Inputs
(Level
3)
|
|||||||||||||
Fixed
income investments
|
||||||||||||||||
Money
market funds
|
$ | 1,597 | $ | − | $ | 1,597 | $ | − | ||||||||
US
government bond fund
|
1,399 | 1,399 | ||||||||||||||
US
corporate bond fund
|
1,503 | 1,503 | ||||||||||||||
US
corporate high yield bond fund
|
867 | 867 | ||||||||||||||
Equity
investments
|
||||||||||||||||
Large
cap value fund
|
3,452 | 3,452 | ||||||||||||||
Large
cap growth fund
|
3,419 | 3,419 | ||||||||||||||
Small
cap growth fund
|
3,249 | 3,249 | ||||||||||||||
Foreign
equity fund
|
1,794 | 1,794 | ||||||||||||||
Company
stock
|
513 | 513 | ||||||||||||||
Total
|
$ | 17,793 | $ | 16,196 | $ | 1,597 | $ | − |
($
in thousands)
|
||||||||||||||||
Total
Fair Value at December 31, 2008
|
Quoted
Prices in Active Markets for Identical Assets (Level
1)
|
Significant
Other Observable Inputs (Level 2)
|
Significant
Unobservable Inputs
(Level
3)
|
|||||||||||||
Fixed
income investments
|
||||||||||||||||
Money
market funds
|
$ | 1,464 | $ | − | $ | 1,464 | $ | − | ||||||||
US
government bond fund
|
1,685 | 1,685 | ||||||||||||||
US
corporate bond fund
|
1,806 | 1,806 | ||||||||||||||
US
corporate high yield bond fund
|
613 | 613 | ||||||||||||||
Equity
investments
|
||||||||||||||||
Large
cap value fund
|
2,076 | 2,076 | ||||||||||||||
Large
cap growth fund
|
1,944 | 1,944 | ||||||||||||||
Mid-small
cap growth fund
|
1,800 | 1,800 | ||||||||||||||
Foreign
equity fund
|
1,003 | 1,003 | ||||||||||||||
Company
stock
|
674 | 674 | ||||||||||||||
Total
|
$ | 13,065 | $ | 11,601 | $ | 1,464 | $ | − |
|
-
|
Money
market fund: valued on the active market on which it is traded;
at amortized cost, which approximates fair
value.
|
|
-
|
Mutual
funds, common stocks: valued at the closing price reported on
the active market on which the individual securities are
traded.
|
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Change in benefit
obligation
|
||||||||||||
Projected
benefit obligation at beginning of year
|
$ | 5,239 | 4,711 | 4,133 | ||||||||
Service
cost
|
464 | 454 | 431 | |||||||||
Interest
cost
|
328 | 264 | 242 | |||||||||
Actuarial
(gain) loss
|
296 | (85 | ) | 10 | ||||||||
Benefits
paid
|
(105 | ) | (105 | ) | (105 | ) | ||||||
Projected
benefit obligation at end of year
|
6,222 | 5,239 | 4,711 | |||||||||
Plan
assets
|
─
|
─
|
─
|
|||||||||
Funded
status at end of year
|
$ | (6,222 | ) | (5,239 | ) | (4,711 | ) |
(In
thousands)
|
2009
|
2008
|
||||||
Other
assets – prepaid pension asset (liability)
|
$ | (4,726 | ) | (3,914 | ) | |||
Other
liabilities
|
(1,496 | ) | (1,325 | ) | ||||
$ | (6,222 | ) | (5,239 | ) |
(In
thousands)
|
2009
|
2008
|
||||||
Net
(gain)/loss
|
$ | 1,357 | 1,167 | |||||
Prior
service cost
|
139 | 158 | ||||||
Amount
recognized in AOCI before tax effect
|
1,496 | 1,325 | ||||||
Tax
benefit
|
(590 | ) | (520 | ) | ||||
Net
amount recognized as reduction to AOCI
|
$ | 906 | 805 |
(In
thousands)
|
2009
|
2008
|
||||||
Prepaid
pension cost (liability) as of beginning of fiscal year
|
$ | (3,914 | ) | (3,229 | ) | |||
Net
periodic pension cost for fiscal year
|
(917 | ) | (790 | ) | ||||
Benefits
paid
|
105 | 105 | ||||||
Prepaid
pension cost (liability) as of end of fiscal year
|
$ | (4,726 | ) | (3,914 | ) |
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Service
cost – benefits earned during the period
|
$ | 464 | 454 | 431 | ||||||||
Interest
cost on projected benefit obligation
|
328 | 264 | 242 | |||||||||
Net
amortization and deferral
|
125 | 72 | 115 | |||||||||
Net
periodic pension cost
|
$ | 917 | 790 | 788 |
(In
thousands)
|
Estimated
benefit payments
|
|||
Year
ending December 31, 2010
|
$ | 136 | ||
Year
ending December 31, 2011
|
192 | |||
Year
ending December 31, 2012
|
223 | |||
Year
ending December 31, 2013
|
319 | |||
Year
ending December 31, 2014
|
314 | |||
Years
ending December 31, 2015-2019
|
2,515 |
2009
|
2008
|
2007
|
||||||||||||||||||||||
Pension
Plan
|
SERP
|
Pension
Plan
|
SERP
|
Pension
Plan
|
SERP
|
|||||||||||||||||||
Discount
rate used to determine net periodic pension cost
|
5.75 | % | 5.75 | % | 6.00 | % | 6.00 | % | 5.75 | % | 5.75 | % | ||||||||||||
Discount
rate used to calculate end of year liability disclosures
|
6.00 | % | 6.00 | % | 5.75 | % | 5.75 | % | 6.00 | % | 6.00 | % | ||||||||||||
Expected
long-term rate of return on assets
|
7.75 | % | n/a | 7.75 | % | n/a | 8.75 | % | n/a | |||||||||||||||
Rate
of compensation increase
|
5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % |
Region,
with counties included in parenthesis
|
Loans
(in
millions)
|
|||
Eastern
North Carolina Region (New Hanover, Brunswick, Duplin, Dare, Beaufort,
Onslow, Carteret)
|
$ | 765 | ||
Triangle
North Carolina Region (Moore, Lee, Harnett, Chatham, Wake)
|
764 | |||
Triad
North Carolina Region (Montgomery, Randolph, Davidson, Rockingham,
Guilford, Stanly)
|
415 | |||
Southern
Piedmont North Carolina Region (Anson, Richmond, Scotland, Robeson,
Bladen, Columbus)
|
242 | |||
South
Carolina Region (Chesterfield, Dillon, Florence, Horry)
|
189 | |||
Virginia
Region (Wythe, Washington, Montgomery, Pulaski)
|
159 | |||
Charlotte
North Carolina Region (Iredell, Cabarrus, Rowan)
|
111 | |||
Other
|
8 | |||
Total
loans
|
$ | 2,653 |
(
$ in
thousands
)
|
||||||||
Issuer
|
Amortized
Cost
|
Fair
Value
|
||||||
Federal
Home Loan Bank System - bonds
|
$ | 31,042 | 31,442 | |||||
Federal
Home Loan Bank of Atlanta - common stock
|
16,519 | 16,519 | ||||||
Freddie
Mac - bonds
|
5,064 | 5,077 | ||||||
Freddie
Mac - mortgage-backed securities
|
7,313 | 7,628 | ||||||
Fannie
Mae - mortgage-backed securities
|
18,120 | 18,993 | ||||||
Ginnie
Mae - mortgage-backed securities
|
83,997 | 85,176 | ||||||
Bank
of America - trust preferred securities
|
7,116 | 6,749 | ||||||
First
Citizens Bancorp (North Carolina) - trust preferred
security
|
2,092 | 1,811 | ||||||
Wells
Fargo - trust preferred security
|
2,567 | 2,428 | ||||||
First
Citizens Bancorp (South Carolina) – bond / trust preferred
securities
|
3,994 | 3,448 |
December
31, 2009
|
December
31, 2008
|
|||||||||||||||
(In
thousands)
|
Carrying
Amount
|
Estimated
Fair Value
|
Carrying
Amount
|
Estimated
Fair Value
|
||||||||||||
Cash
and due from banks, noninterest-bearing
|
$ | 60,071 | 60,071 | 88,015 | 88,015 | |||||||||||
Due
from banks, interest-bearing
|
283,175 | 283,175 | 105,191 | 105,191 | ||||||||||||
Federal
funds sold
|
7,626 | 7,626 | 31,574 | 31,574 | ||||||||||||
Securities
available for sale
|
179,755 | 179,755 | 171,193 | 171,193 | ||||||||||||
Securities
held to maturity
|
34,413 | 34,947 | 15,990 | 15,811 | ||||||||||||
Presold
mortgages in process of settlement
|
3,967 | 3,967 | 423 | 423 | ||||||||||||
Loans
- non-covered, net of allowance
|
2,095,500 | 2,063,267 | 2,182,059 | 2,186,229 | ||||||||||||
Loans
- covered, net of allowance
|
520,022 | 520,022 | − | − | ||||||||||||
FDIC
loss share receivable
|
143,221 | 141,253 | − | − | ||||||||||||
Accrued
interest receivable
|
14,783 | 14,783 | 12,653 | 12,653 | ||||||||||||
Deposits
|
2,933,108 | 2,942,539 | 2,074,791 | 2,082,691 | ||||||||||||
Securities
sold under agreements to repurchase
|
64,058 | 64,058 | 61,140 | 61,140 | ||||||||||||
Borrowings
|
176,811 | 141,176 | 367,275 | 339,139 | ||||||||||||
Accrued
interest payable
|
3,054 | 3,054 | 5,077 | 5,077 |
($
in thousands)
|
||||||||||||||||
Description
of Financial Instruments
|
Fair
Value at December 31, 2009
|
Quoted
Prices in Active Markets for Identical Assets (Level
1)
|
Significant
Other Observable Inputs (Level 2)
|
Significant
Unobservable Inputs
(Level
3)
|
||||||||||||
Recurring
|
||||||||||||||||
Securities
available for sale
|
$ | 179,755 | 485 | 179,270 | — | |||||||||||
Nonrecurring
|
||||||||||||||||
Impaired
loans - covered
|
94,746 | — | 94,746 | — | ||||||||||||
Impaired
loans - non-covered
|
45,857 | — | 45,857 | — | ||||||||||||
Other
real estate - covered
|
47,430 | — | 47,430 | — | ||||||||||||
Other
real estate - non-covered
|
8,793 | — | 8,793 | — |
2009
|
2008
|
2007
|
||||||||||
Expected
dividend yield
|
2.23 | % | 4.58 | % | 3.88 | % | ||||||
Risk-free
interest rate
|
3.28 | % | 4.17 | % | 4.92 | % | ||||||
Expected
life
|
7
years
|
9.7
years
|
7
years
|
|||||||||
Expected
volatility
|
46.32 | % | 34.65 | % | 32.91 | % |
Options
Outstanding
|
||||||||||||||||
Number
of Shares
|
Weighted-Average
Exercise Price
|
Weighted-Average
Contractual
Term (years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Balance
at December 31, 2006
|
656,104 | $ | 16.94 | |||||||||||||
Granted
|
24,750 | 19.61 | ||||||||||||||
Exercised
|
(62,372 | ) | 12.95 | $ | 535,000 | |||||||||||
Forfeited
|
(10,500 | ) | 21.70 | |||||||||||||
Expired
|
– | – | ||||||||||||||
Balance
at December 31, 2007
|
607,982 | 17.38 | ||||||||||||||
Granted
|
296,849 | 16.63 | ||||||||||||||
Assumed
in corporate acquisition
|
88,409 | 14.39 | ||||||||||||||
Exercised
|
(76,849 | ) | 13.83 | $ | 304,330 | |||||||||||
Forfeited
|
(87,515 | ) | 16.53 | |||||||||||||
Expired
|
– | – | ||||||||||||||
Balance
at December 31, 2008
|
828,876 | 17.21 | ||||||||||||||
Granted
|
27,000 | 14.35 | ||||||||||||||
Exercised
|
(73,843 | ) | 13.14 | $ | 251,000 | |||||||||||
Forfeited
|
− | − | ||||||||||||||
Expired
|
(28,917 | ) | 11.52 | |||||||||||||
Outstanding
at December 31, 2009
|
753,116 | $ | 17.73 | 5.1 | $ | — | ||||||||||
Exercisable
at December 31, 2009
|
573,532 | $ | 18.06 | 4.0 | $ | — |
Options
Outstanding
|
Options
Exercisable
|
|||||||||||||||||||
Range
of
Exercise Prices
|
Number
Outstanding
at
12/31/09
|
Weighted-Average
Remaining Contractual Life
|
Weighted-
Average
Exercise
Price
|
Number
Exercisable
at
12/31/09
|
Weighted-
Average
Exercise
Price
|
|||||||||||||||
$8.85
to $11.06
|
22,098 | 1.1 | $ | 10.49 | 22,098 | $ | 10.49 | |||||||||||||
$11.06
to $13.27
|
− | − | − | − | − | |||||||||||||||
$13.27
to $15.48
|
171,404 | 2.9 | 15.18 | 171,404 | 15.18 | |||||||||||||||
$15.48
to $17.70
|
293,884 | 6.7 | 16.51 | 118,800 | 16.47 | |||||||||||||||
$17.70
to $19.91
|
56,250 | 5.7 | 19.65 | 56,250 | 19.65 | |||||||||||||||
$19.91
to $22.12
|
209,480 | 4.9 | 21.76 | 204,980 | 21.78 | |||||||||||||||
753,116 | 5.1 | $ | 17.73 | 573,532 | $ | 18.06 |
Nonvested
Performance Units
|
Long-Term
Restricted Stock
|
|||||||||||||||
Number
of Units
|
Weighted-Average
Grant-Date Fair Value
|
Number
of Units
|
Weighted-Average
Grant-Date Fair Value
|
|||||||||||||
Nonvested
at January 1, 2008
|
– | $ | – | – | $ | – | ||||||||||
Granted
during the period
|
81,337 | 16.53 | – | – | ||||||||||||
Vested
during the period
|
– | – | – | – | ||||||||||||
Forfeited
or expired during the period
|
(27,112 | ) | 16.53 | – | – | |||||||||||
Nonvested
at December 31, 2008
|
54,225 | $ | 16.53 | – | $ | – | ||||||||||
Granted
during the period
|
– | – | 29,267 | $ | 13.59 | |||||||||||
Vested
during the period
|
– | – | – | – | ||||||||||||
Forfeited
or expired during the period
|
– | – | – | – | ||||||||||||
Nonvested
at December 31, 2009
|
54,225 | $ | 16.53 | 29,267 | $ | 13.59 |
Actual
|
For
Capital
Adequacy
Purposes
|
To
Be Well Capitalized
Under
Prompt Corrective
Action
Provisions
|
||||||||||||||||||||||
($
in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
(must
equal or exceed)
|
(must
equal or exceed)
|
|||||||||||||||||||||||
As
of December 31, 2009
|
||||||||||||||||||||||||
Total
Capital Ratio
|
||||||||||||||||||||||||
Company
|
$ | 349,858 | 15.14 | % | $ | 184,904 | 8.00 | % | $ | N/A | N/A | |||||||||||||
Bank
|
346,178 | 14.99 | % | 184,732 | 8.00 | % | 230,915 | 10.00 | % | |||||||||||||||
Tier
I Capital Ratio
|
||||||||||||||||||||||||
Company
|
320,862 | 13.88 | % | 92,452 | 4.00 | % | N/A | N/A | ||||||||||||||||
Bank
|
317,209 | 13.74 | % | 92,366 | 4.00 | % | 138,549 | 6.00 | % | |||||||||||||||
Leverage
Ratio
|
||||||||||||||||||||||||
Company
|
320,862 | 9.30 | % | 137,987 | 4.00 | % | N/A | N/A | ||||||||||||||||
Bank
|
317,209 | 9.20 | % | 137,868 | 4.00 | % | 172,335 | 5.00 | % | |||||||||||||||
As
of December 31, 2008
|
||||||||||||||||||||||||
Total
Capital Ratio
|
||||||||||||||||||||||||
Company
|
$ | 232,529 | 10.65 | % | $ | 174,626 | 8.00 | % | $ | N/A | N/A | |||||||||||||
Bank
|
252,914 | 11.60 | % | 174,462 | 8.00 | % | 218,077 | 10.00 | % | |||||||||||||||
Tier
I Capital Ratio
|
||||||||||||||||||||||||
Company
|
205,244 | 9.40 | % | 87,313 | 4.00 | % | N/A | N/A | ||||||||||||||||
Bank
|
225,654 | 10.35 | % | 87,231 | 4.00 | % | 130,846 | 6.00 | % | |||||||||||||||
Leverage
Ratio
|
||||||||||||||||||||||||
Company
|
205,244 | 8.10 | % | 101,377 | 4.00 | % | N/A | N/A | ||||||||||||||||
Bank
|
225,654 | 8.91 | % | 101,293 | 4.00 | % | 126,616 | 5.00 | % |
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Other
service charges, commissions, and fees – electronic payment processing
revenue
|
$ | 3,061 | 2,544 | 2,258 | ||||||||
Other
gains (losses) – acquisition gain – see Note 2
|
67,894 | − | − | |||||||||
Other
operating expenses – electronic payment processing expense
|
1,278 | 955 | 707 | |||||||||
Other
operating expenses – stationery and supplies
|
2,181 | 1,903 | 1,593 | |||||||||
Other
operating expenses – FDIC insurance expense
|
5,500 | 1,157 | 100 |
CONDENSED
BALANCE SHEETS
|
As
of December 31,
|
|||||||
(In
thousands)
|
2009
|
2008
|
||||||
Assets
|
||||||||
Cash
on deposit with bank subsidiary
|
$ | 4,322 | 1,767 | |||||
Investment
in wholly-owned subsidiaries, at equity
|
384,329 | 286,070 | ||||||
Premises
and Equipment
|
183 | 194 | ||||||
Other
assets
|
1,685 | 1,729 | ||||||
Total
assets
|
$ | 390,519 | 289,760 | |||||
Liabilities and shareholders’
equity
|
||||||||
Trust
preferred securities
|
$ | 46,394 | 66,394 | |||||
Other
liabilities
|
1,742 | 3,498 | ||||||
Total
liabilities
|
48,136 | 69,892 | ||||||
Shareholders’
equity
|
342,383 | 219,868 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 390,519 | 289,760 |
CONDENSED
STATEMENTS OF INCOME
|
Year
Ended December 31,
|
|||||||||||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Dividends
from wholly-owned subsidiaries
|
$ | 13,250 | 8,500 | 18,200 | ||||||||
Undistributed
earnings of wholly-owned subsidiaries
|
49,024 | 16,694 | 7,959 | |||||||||
Interest
expense
|
(1,356 | ) | (3,312 | ) | (5,293 | ) | ||||||
All
other income and expenses, net
|
(659 | ) | 123 | 944 | ||||||||
Net
income
|
$ | 60,259 | 22,005 | 21,810 | ||||||||
Preferred
stock dividends and accretion
|
(3,972 | ) | — | — | ||||||||
Net
income available to common shareholders
|
$ | 56,287 | 22,005 | 21,810 |
CONDENSED
STATEMENTS OF CASH FLOWS
|
Year
Ended December 31,
|
|||||||||||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Operating
Activities:
|
||||||||||||
Net
income
|
$ | 60,259 | 22,005 | 21,810 | ||||||||
Equity
in undistributed earnings of subsidiaries
|
(49,024 | ) | (16,694 | ) | (7,959 | ) | ||||||
Decrease
in other assets
|
72 | 132 | 953 | |||||||||
Decrease
in other liabilities
|
(349 | ) | (91 | ) | (76 | ) | ||||||
Total
– operating activities
|
10,958 | 5,352 | 14,728 | |||||||||
Investing
Activities:
|
||||||||||||
Downstream
cash investment in subsidiary
|
(45,000 | ) |
—
|
—
|
||||||||
Cash
proceeds from dissolution of subsidiary
|
—
|
—
|
111 | |||||||||
Proceeds
from sales of investments
|
—
|
500 |
—
|
|||||||||
Net
cash received in acquisition of Great Pee Dee Bancorp,
Inc.
|
—
|
485 |
—
|
|||||||||
Total
– investing activities
|
(45,000 | ) | 985 | 111 | ||||||||
Financing
Activities:
|
||||||||||||
Repayments
of borrowings, net
|
(20,000 | ) |
—
|
(619 | ) | |||||||
Payment
of cash dividends
|
(9,908 | ) | (11,738 | ) | (10,923 | ) | ||||||
Proceeds
from issuance of preferred stock and common stock warrants
|
65,000 |
—
|
—
|
|||||||||
Proceeds
from issuance of common stock
|
1,505 | 1,957 | 568 | |||||||||
Purchases
and retirement of common stock
|
—
|
—
|
(532 | ) | ||||||||
Total
- financing activities
|
36,597 | (9,781 | ) | (11,506 | ) | |||||||
Net
increase (decrease) in cash
|
2,555 | (3,444 | ) | 3,333 | ||||||||
Cash,
beginning of year
|
1,767 | 5,211 | 1,878 | |||||||||
Cash,
end of year
|
$ | 4,322 | 1,767 | 5,211 |
Expected
dividend yield
|
4.83 | % | ||
Risk-free
interest rate
|
2.48 | % | ||
Expected
life
|
10
years
|
|||
Expected
volatility
|
35.00 | % | ||
Weighted
average fair value
|
$ | 4.47 |
/s/
Elliott Davis
|
/s/
Elliott Davis
|
10.f
|
First
Bancorp 2004 Stock Option Plan was filed as Exhibit B to the Registrant's
Form Def 14A filed on March 30, 2004 and is incorporated herein by
reference. (*)
|
|
10.g
|
First
Bancorp 2007 Equity Plan was filed as Appendix B to the Registrant's Form
Def 14A filed on March 27, 2007 and is incorporated herein by reference.
(*)
|
|
10.h
|
Employment
Agreement between the Company and Anna G. Hollers dated August 17, 1998
was filed as Exhibit 10(m) to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998, and is incorporated by reference
(Commission File Number 000-15572). (*)
|
|
10.i
|
Employment
Agreement between the Company and Teresa C. Nixon dated August 17, 1998
was filed as Exhibit 10(n) to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998, and is incorporated by reference
(Commission File Number 000-15572). (*)
|
|
10.j
|
Employment
Agreement between the Company and Eric P. Credle dated August 17, 1998 was
filed as Exhibit 10(p) to the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, and is incorporated herein by reference
(Commission File Number 333-71431).(*)
|
|
10.k
|
Employment
Agreement between the Company and John F. Burns dated September 14, 2000
was filed as Exhibit 10.w to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 2000 and is incorporated herein by
reference. (*)
|
|
10.l
|
Employment
Agreement between the Company and R. Walton Brown dated January 15, 2003
was filed as Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 2003 and is incorporated herein by
reference. (*)
|
|
10.m
|
Amendment
to the employment agreement between the Company and R. Walton Brown dated
March 8, 2005 was filed as Exhibit 10.n to the Company's Annual Report on
Form 10-K for the year ended December 31, 2004 and is incorporated herein
by reference. (*)
|
|
10.n
|
Employment
Agreement between the Company and Jerry L. Ocheltree was filed as Exhibit
10.1 to the Form 8-K filed on January 25, 2006, and is incorporated herein
by reference. (*)
|
|
10.o
|
First
Bancorp Long Term Care Insurance Plan was filed as Exhibit 10(o) to the
Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 2004, and is incorporated by reference. (*)
|
|
10.p
|
Advances
and Security Agreement with the Federal Home Loan Bank of Atlanta dated
February 15, 2005 was attached as Exhibit 99(a) to the Form 8-K filed on
February 22, 2005, and is incorporated herein by
reference.
|
|
10.q
|
Description
of Director Compensation pursuant to Item 601(b)(10)(iii)(A) of Regulation
S-K was filed as Exhibit 10.q to the Company's Annual Report on Form 10-K
for the year ended December 31, 2008 and is incorporated herein by
reference.
|
|
10.r
|
Letter
Agreement, dated January 9, 2009, including Securities Purchase
Agreement—Standard Terms, between First Bancorp and the United States
Department of the Treasury, is incorporated herein by reference to the
Company’s Form 8-K Current Report filed on January 13,
2009.
|
|
10.s
|
Purchase
and Assumption Agreement among Federal Deposit Insurance Corporation,
Receiver of Cooperative Bank, Federal Deposit Insurance Corporation
and First Bank dated as of June 19, 2009 was filed as Exhibit 10.1 to the
Company’s Form 8-K filed on June 24,
2009.
|
10.t
|
Form
of Waiver by Senior Officers (TARP Capital Purchase Program) was filed as
Exhibit 10.a to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2009 and is incorporated herein by
reference.
|
|
Form
of Restricted Stock Award Agreement under the First Bancorp 2007 Equity
Plan. (*)
|
||
First
Bancorp Employees’ Pension Plan, including amendments.
(*)
|
||
Computation
of Ratio of Earnings to Fixed Charges
|
||
List
of Subsidiaries of Registrant.
|
||
Consent
of Independent Registered Public Accounting Firm, Elliott Davis,
PLLC
|
||
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302(a)
of the Sarbanes-Oxley Act of 2002.
|
||
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302(a)
of the Sarbanes-Oxley Act of 2002.
|
||
Chief
Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
||
Chief
Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
||
Certification
of Principal Executive Officer pursuant to the Emergency Economic
Stabilization Act of 2008.
|
||
Certification
of Principal Financial Officer pursuant to the Emergency Economic
Stabilization Act of 2008.
|
||
(b)
|
Exhibits
- see (a)(3) above
|
|
(c)
|
No
financial statement schedules are filed herewith.
|
|
By:
|
/s/ Jerry L.
Ocheltree
|
||
Jerry
L. Ocheltree
|
|||
President,
Chief Executive Officer and Treasurer
|
/s/ Jerry L. Ocheltree
|
||
Jerry
L. Ocheltree
|
||
President,
Chief Executive Officer and Treasurer
|
/s/ Anna G. Hollers
|
/s/ Eric P. Credle
|
Anna
G. Hollers
|
Eric
P. Credle
|
Executive
Vice President
|
Executive
Vice President
|
Chief
Operating Officer / Secretary
|
Chief
Financial Officer
|
March
16, 2010
|
(Principal
Accounting Officer)
|
March
16, 2010
|
|
Board of Directors
|
|
/s/ Thomas F. Phillips
|
/s/ Jerry L. Ocheltree
|
Thomas
F. Phillips
|
Jerry
L. Ocheltree
|
Chairman
of the Board
|
Director
|
Director
|
March
16, 2010
|
March
16, 2010
|
|
/s/ Jack D. Briggs
|
/s/ George R. Perkins,
Jr.
|
Jack
D. Briggs
|
George
R. Perkins, Jr.
|
Director
|
Director
|
March
16, 2010
|
March
16, 2010
|
/s/ R. Walton Brown
|
/s/ Frederick L. Taylor
II
|
R.
Walton Brown
|
Frederick
L. Taylor II
|
Director
|
Director
|
March
16, 2010
|
March
16, 2010
|
/s/ David L. Burns
|
/s/ Virginia C.
Thomasson
|
David
L. Burns
|
Virginia
C. Thomasson
|
Director
|
Director
|
March
16, 2010
|
March
16, 2010
|
/s/ John F. Burns
|
/s/ Goldie H. Wallace
|
John
F. Burns
|
Goldie
H. Wallace
|
Director
|
Director
|
March
16, 2010
|
March
16, 2010
|
/
s/ Mary Clara Capel
|
/s/ Dennis A. Wicker
|
Mary
Clara Capel
|
Dennis
A. Wicker
|
Director
|
Director
|
March
16, 2010
|
March
16, 2010
|
/s/ James C. Crawford, III
|
/s/ John C. Willis
|
James
C. Crawford, III
|
John
C. Willis
|
Director
|
Director
|
March
16, 2010
|
March
16, 2010
|
/s/ James G. Hudson, Jr.
|
|
James
G. Hudson, Jr.
|
|
Director
|
|
March
16, 2010
|
Participant:
|
|||
Print
Name:
|
FIRST
BANCORP
|
|||
By:
|
|||
Its:
|
Article
|
Page
|
|
1
|
DEFINITIONS
|
2
|
2
|
ELIGIBILITY
|
14
|
3
|
EARLY
RETIREMENT
|
16
|
4
|
NORMAL
RETIREMENT
|
17
|
5
|
DELAYED
RETIREMENT
|
27
|
6
|
DISABILITY
RETIREMENT
|
28
|
7
|
SURVIVOR
BENEFITS
|
31
|
8
|
TERMINATION
OF EMPLOYMENT-VESTING
|
38
|
9
|
PAYMENT
OF RETIREMENT BENEFITS
|
40
|
10
|
RE-EMPLOYMENT
/ RESTORATION OF SERVICE AND ACCRUED BENEFITS
|
45
|
11
|
TOP
HEAVY RULES
|
49
|
12
|
RETIREMENT
COMMITTEE
|
54
|
13
|
CLAIM
PROCEDURE
|
56
|
14
|
CONTRIBUTIONS
AND FUNDING
|
58
|
15
|
ADMINISTRATIVE
AND FIDUCIARIES’ RESPONSIBILITIES
|
59
|
16
|
INCOME
TAX REGULATIONS 1.401-4(C)(2)
|
62
|
17
|
SPENDTHRIFT
|
65
|
18
|
THE
INSURER
|
66
|
19
|
AMENDMENT
AND TERMINATION
|
67
|
20
|
MISCELLANEOUS
PROVISIONS
|
72
|
21
|
DIRECT
ROLLOVERS
|
74
|
APPENDIX
A
|
COVERED
COMPENSATION 35 YEAR AVERAGE TABLE (2001)
|
76
|
APPENDIX
B
|
SOCIAL
SECURITY INTEGRATION LIMIT ON EARLY OR DEFERRED COMMENCEMENT OF
BENEFITS
|
77
|
1.1
|
Accrued
Benefit
shall mean a Participant's benefit on any given
date and will be the benefit to which he will be entitled at his Normal
Retirement Date. The Accrued Benefit is the Participant's
Accrued Benefit at Normal Retirement Date, calculated under Section 4.2
herein, using actual Years of Benefit Service and Final Average
Compensation as of the accrual date. In no event shall the
Accrued Benefit as of any accrual date subsequent to this amendment be
less than the Accrued Benefit as of the adoption date of this
amendment.
|
1.2
|
Actuarial (or
Actuarially) Equivalent
shall mean a benefit of equivalent value to
the Normal Annuity Form determined by generally accepted actuarial
principles.
|
|
(a)
|
For Benefits Not Paid
As A Lump Sum
- All alternate forms of distribution shall be
Actuarially Equivalent to the Normal Annuity Form of distribution at the
Normal Retirement Date. The conversion to an alternate form
shall be based upon the 1983 Group Annuity Male Mortality Table and an
interest rate of 8%. In no event shall the Actuarial Equivalent
of a benefit to which Section 1.2(a) or (d) is applicable be less than the
Actuarial Equivalent based on factors in effect immediately prior to the
adoption of any amendment changing such factors, as applied to the Accrued
Benefit determined immediately prior to the later of the adoption of or
effective date of such amendment.
|
|
(b)
|
For Benefits Paid As A
Lump Sum
. The determination of lump sum values shall be
based upon (i) “the applicable interest rate” (under Code Section
417(e)(3)(A)(ii)(II)) which shall be the annual rate of interest on
30-year Treasury securities for the month one month prior to the beginning
of the Plan Year during which such distribution is made, and (ii) the
"applicable mortality table" under Rev. Rul.
95-6.
|
|
(c)
|
For Determination of
Top Heavy Status
- Pursuant to Section 11.3, "Present Value" shall
be determined on the basis of a (5%) interest rate assumption and the 1983
Group Annuity Mortality Table.
|
|
(d)
|
For Determination of
the Actuarial Reduction of Monthly Benefits For Commencement Prior To Age
55
- (and for determining reductions in the Excess Percentage
referred to in Section 4.2) a five percent (5%) interest rate and the 1983
Group Annuity Mortality Table for males shall be used. These
factors shall be applied only after the Accrued Benefit has been reduced
to age 55 by the other applicable reduction factors under Section 3.1, and
such reduction shall apply only to the time period prior to age
55.
|
1.3
|
Adjustment
Factor
shall mean the cost of living adjustment factor prescribed
by the Secretary of the Treasury under Code Section 415(d) for years
beginning after December 31, 1987, applied to such items and in such
manner as the Secretary shall
prescribe.
|
1.4
|
Affiliated
Employer
shall mean the Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code Section
414(b)) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section
414(c)) with the Employer; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in Code
Section 414(m)) which includes the Employer; and any other entity required
to be aggregated with the Employer pursuant to regulations under Code
Section 414(o).
|
|
(a)
|
a
parent-subsidiary group, or
|
|
(b)
|
a
brother-sister group, or
|
|
(c)
|
a
combined group
|
1.5
|
Annuity Starting
Date
shall mean the first day of the first period for which a
benefit under this Plan is payable in the form of an
annuity. In the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred which entitle the
Participant to such benefit.
|
1.6
|
Beneficiary
shall mean any person or legal entity designated by a Participant pursuant
to Section 7.7 herein to receive benefits under this
Plan.
|
1.7
|
Board
shall
mean the Board of Directors of the
Employer.
|
1.8
|
Break-In-Service
shall
mean the failure of a Participant to complete more than five hundred (500)
Hours of Service during a twelve (12) consecutive month Plan Year
period.
|
1.9
|
Code
shall mean
the Internal Revenue Code of 1986 and amendments
thereto.
|
1.10
|
Committee
shall
mean the Pension Retirement Committee as established under Article 12 of
the Plan (also known as the Pension Committee or the Retirement
Committee).
|
1.11
|
Compensation
-
An Employee's Compensation for any Plan Year shall be total annual
compensation actually paid to the Employee by the Employer for the Plan
Year concerned, including any amount of earnings deferred under any other
qualified Employer sponsored plan under Code Sections 125, 401(k), 403(b),
408(k) for Plan Years beginning after January 1, 2001, Code Section
132(f), or any other qualified cash or deferred arrangement, but excluding
any reimbursements for the use of an automobile, any reimbursements due to
travel or moving expenses, travel or entertainment and the taxable value
of any Employer paid group term life insurance, or other taxable fringe
benefit provided by the Employer.
|
|
(a)
|
elective
contributions that are made by the Employer on behalf of a Participant
that are not includible income under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b), and for Plan Years beginning on or after January 1,
2001, 132(f)(4);
|
|
(b)
|
Compensation
deferred under an eligible deferred compensation plan within the meaning
of Code Section 457(b); and
|
|
(c)
|
Employee
contributions (under governmental plans) described in Code Section
414(h)(2) that are picked up by the employing unit and thus are treated as
Employer contributions.
|
1.12
|
Computation
Periods
:
|
|
(a)
|
Eligibility
Computation Period
- For purposes of determining Years of Service
and Breaks in Service for purposes of eligibility, the initial Eligibility
Computation Period is the 12-consecutive month period beginning on the
date the Employee first performs an Hour of Service for the
Employer. The succeeding 12-consecutive month period commences
with the first Plan Year which commences prior to the first anniversary of
the Employee's initial Eligibility Computation Period regardless of
whether the Employee is entitled to be credited with 1,000 Hours of
Service during the initial Eligibility Computation Period. An
Employee who is credited with 1,000 Hours of Service in both the initial
Eligibility Computation Period and
|
|
(b)
|
Vesting Computation
Period
- The 12 consecutive month period beginning with the first
day of the Plan Year and ending with the last day of the Plan Year in
which an Employee is credited with 1,000 or more Hours of
Service. Thus, if an Employee is not credited with at least
1,000 Hours of Service during a Plan Year, he is not given credit for a
Year of Vesting Service.
|
|
(c)
|
Accrual of Benefit
Computation Period
- The 12 consecutive month period beginning with
the first day of the Plan Year and ending with the last day of the Plan
Year during which an Employee is credited with at least 1,000 or more
Hours of Service. Thus, if an Employee is not credited with at
least 1,000 Hours of Service during a Plan Year, he is not given credit
for a year of benefit accrual for that Plan
Year.
|
1.13
|
Covered
Compensation
shall mean the average (without indexing) of the
taxable wage bases in effect for each calendar year during the 35 year
period ending with the last day of the calendar year in which the
Participant attains (or will attain) his Social Security Retirement
Age. The Covered Compensation Table to be used under this Plan
is the table rounded to the next lower multiple of $12.00. As
this Covered Compensation Table is updated each year for increases in the
Social Security taxable wage base, the updated Table will be deemed a part
of this Plan, and will be effective for the Plan Year beginning in such
calendar year (See
Appendix A
for the 2001
35-Year Average Table). In the event of termination of
employment of a Participant, the Covered Compensation Table used in
determining such Participant's Accrued Benefit shall be the Table in
effect for the Plan Year in which the termination of employment
occurs.
|
1.14
|
Dates
:
|
|
(a)
|
The
original
Effective Date
of the Plan was January 1, 1993. The
Effective Date of this Amendment and Restatement is January 1,
2001.
|
|
(b)
|
Anniversary
Date
is January 1, 2001, and thereafter the Anniversary Date shall
be the first day of each Plan Year.
|
|
(c)
|
Plan
Year
: The Plan Year shall begin each January 1 and end
the following December 31.
|
|
(d)
|
Entry Date
shall mean the first day of the Plan Year (January 1) and the first day of
the seventh month of the Plan Year (July
1).
|
|
(e)
|
Valuation Date
is each January 1. A Valuation Date is the annual date on which
plan assets and liabilities are
valued.
|
1.15
|
Eligible
Spouse
shall mean one to whom a Participant is married
throughout the one year period ending on the earlier of the Participant's
Annuity Starting Date or the Participant's date of death, provided that a
former spouse will be treated as the Eligible Spouse to the extent
provided under a Qualified Domestic Relations Order as described in
section 414(p) of the Code.
|
1.16
|
Employee
shall
mean any employee of the Employer maintaining the Plan or of any other
employer required to be aggregated with such Employer under Code sections
414(b), (c), (m) or (o).
|
1.17
|
Employer or
Company
shall mean First Bancorp (EIN#56-1421916) or any
other organization which has adopted the Plan with the consent of such
establishing employer; and any successor of such employer. The
term Employer shall also apply to any subsidiary or affiliated
corporations who adopt the Plan and who, at the time such reference
applies, are included in the list of Affiliated Employers set forth
below. For the purpose of this Plan, First Bancorp, shall deal
exclusively with the Funding Agent and shall be deemed the representative
of each Employer, and any action taken by First Bancorp, shall be binding
on all Employers.
|
List of Affiliated
Employers
|
EIN#
|
Date of Plan Adoption
|
||
First
Bank
|
56-0132230
|
1-1-93
|
||
First
Bancorp Financial Services
|
56-1597887
|
1-1-93
|
||
First
Montgomery Financial
|
||||
Services
Corporation
|
54-2061020
|
1-1-93
|
||
First
Bank Insurance Services, Inc.
|
56-1659931
|
1-1-93
|
||
First
Troy Realty Corporation
|
56-2140094
|
1-1-93
|
1.18
|
Fund, Trust, or Trust
Fund
shall be synonymous and shall mean the total of the
contributions made by the Employer pursuant to the Plan and held by the
Trustee in a Trust or any Group Annuity Contract created by the Employer
under the Plan, increased by profits or income thereon and decreased by
any benefit payments, or any loss or expense incurred in the
administration of the Trust or Plan or payments
therefrom.
|
1.19
|
Gender and
Number
- The masculine pronoun shall include the feminine and the
singular shall include the plural.
|
1.20
|
Hour of
Service
shall mean each hour for which an Employee is
either directly or indirectly paid, or entitled to payment by the Employer
for the performance of duties during the applicable computation
period.
|
|
(a)
|
Crediting Hours
- Hours shall be credited to an Employee for the Computation Period or
periods in which the duties were performed. Each hour for which
any back pay, irrespective of mitigation of damages, has been either
awarded or agreed to by the Employer, shall be credited to the Employee
for the Computation Period or periods to which the award or agreement
pertains (and not the Computation Period in which the award, agreement or
payment is made). Salaried and commissioned Employees employed
by the Employer whose compensation is not determined on the basis of hours
worked and whose hours are not required to be recorded by any other
Federal law shall be credited with forty-five (45) Hours of Service per
week during which the Employee is performing services on behalf of the
Employer (and actually performs at least one Hour of Service); provided,
however, that this alternative method for salaried and commissioned
Employees may only be used if it results in crediting an Employee to whom
it is applied with at least one thousand (1,000) Hours of Service for the
respective computation period.
|
|
(b)
|
Leave of Absence
Without Pay
- A Leave of Absence not in excess of one (1) year
granted as such by the Employer for reasons of illness, injury, pregnancy,
reduction of work force, educational purposes or for periods of military
service during which the Participant's re-employment rights are protected
by law shall not be considered a termination of employment provided that
the Participant shall return to the service of the Employer within ninety
(90) days after such Leave of Absence. If the Participant shall
not so return, he shall be deemed to have terminated employment at the
time the absence commenced. No credit for Hours of Service
shall be given for Leave of Absence without pay. An Hour of
Service required by Federal law to be credited to an Employee (such as for
military duty) shall be credited as an Hour of Service under this
Plan.
|
|
(c)
|
Department of Labor
Regulations
2530-200b-2(b) and (c) are herein incorporated by
reference.
|
|
(d)
|
Solely
for purposes of determining whether a Break in Service (as defined in
Section 1.8 for participation and vesting purposes), has occurred in a
Computation Period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which
would otherwise have been credited to such individual but for such
absence. For this purpose, eight (8) Hours of Service per day of such
absence shall be credited, subject to a maximum of 501 Hours of Service
for maternity or paternity Leave of Absence. For purposes of
this paragraph, such an absence means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of a birth of a child of the
individual, (3) by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual, or (4)
for purposes of caring for such child for a period beginning immediately
following such birth or placement. The Hours of Service
credited under this paragraph shall be credited (1) in the Computation
Period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in
the following Computation Period.
|
1.21
|
Insurer
- Any
insurance company licensed to do business in any state where this Plan is
located.
|
1.22
|
Leased Employee
effective for Plan Years beginning after December 31, 1996, means any
person (other than an Employee of the recipient) who pursuant to an
agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the
recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one
year, and such services are performed under the primary direction or
control of recipient. Contributions or benefits provided to a
Leased Employee by the leasing organization which are attributable to
services performed for the recipient employer shall be treated as provided
by the recipient employer. A Leased Employee shall not be
considered an Employee of the
recipient:
|
|
(a)
|
if
such employee is covered by a money purchase pension plan
providing:
|
|
(1)
|
a
non-integrated contribution rate of at least 10% of compensation, as
defined in Code Section 415 (c)(3), but including amounts which are
contributed by the Employer pursuant to a salary reduction agreement and
which are not includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b), 457(b) or, for Limitation
Years beginning on or after Janaury 1, 2001, Code Section 132(f), and
Employee contributions described in Code Section 414(h)(2) that are
treated as Employer contributions.
|
|
(2)
|
immediate
participation; and
|
|
(3)
|
full
and immediate vesting; and
|
|
(b)
|
if
Leased Employees do not constitute more than 20% of the recipient's
non-highly compensated work force.
|
1.23
|
Limitation
Year
shall mean the 12 month period beginning January 1
and ending the following December 31. Execution of this Plan
(or any amendment to this Plan changing the Limitation Year) constitutes
adoption of a written resolution by the Employer electing a Limitation
Year pursuant to governmental
regulations.
|
1.24
|
Normal Annuity
Form
- The Normal Annuity Form for an
unmarried
Participant shall be a life annuity which provides monthly payments to the
Participant, the first payment becoming due on the first day of the month
coinciding with or next following such Participant's retirement date, if
he is then living, and subsequent payments of an equal amount monthly
thereafter during the lifetime of such Participant, terminating with the
last payment due preceding the death of such
Participant.
|
1.25
|
Normal Retirement
Age
shall be age sixty-five
(65).
|
1.26
|
Normal Retirement
Date
for a Participant shall be the first day of the
month coinciding with or next following the Participant's sixty-fifth
(65th) birthday.
|
1.27
|
Participant
shall mean any Employee of the Employer who has met the eligibility and
participation requirements of the Plan pursuant to Article 2
herein. The term Participant shall also mean a former Employee
who retired or terminated with vested benefits, or such other former
Employee whose service cannot be disregarded under the Break in Service
rules; provided such former Employee shall participate on his rehire
date. In the event a former Participant, who is eligible for
re-entry into the Plan
,
has received a lump
sum distribution of his vested balance, which is less than the present
value of his Accrued Benefit, and repays such amount upon re-employment,
his Accrued Benefit shall be
restored.
|
1.28
|
Plan
shall
mean the First Bancorp Employees’ Pension Plan as embodied in this
instrument, any and all supporting documents, and all subsequent
amendments and supplements thereto.
|
1.29
|
Plan
Administrator
shall mean the Employer, unless otherwise
designated by the Board.
|
1.30
|
Qualified Joint &
Survivor Annuity
shall be the Actuarial Equivalent of
the Normal Annuity Form, and shall provide an immediate annuity for the
life of the Participant with a survivor annuity for the life of the
Eligible Spouse which is 50% of the amount of the annuity payable during
the joint lives of the Participant and the Eligible Spouse. For
purposes of Section 4.3(a) regarding the maximum benefit limitations,
Joint and Survivor annuities with 50% to 100% continuation to the Eligible
Spouse will be considered a "Qualified Joint and Survivor
Annuity."
|
1.31
|
Qualifying Year of
Service
shall mean an Eligibility Computation Period as
defined in Section 1.12(a) during which an Employee completes at least
1,000 Hours of Service and (subject to Section 10.1), shall commence on
such Employee's latest employment commencement
date.
|
1.32
|
Service
. The
specific categories of Service herein shall include, where applicable, all
service required under Code Section 414(a), with the predecessor employer
who maintained this Plan.
|
|
(a)
|
Years of
Service
|
|
(1)
|
Years of Service prior
to January 1, 1993
, shall mean all of an Employee's full years and
completed months of continuous employment, provided he was employed by the
Employer on January 1, 1993.
|
|
(2)
|
Years of Service on or
after January 1, 1993,
shall mean all Plan Years during which an
Employee completed 1,000 or more Hours of Service with the Employer or any
Affiliated Employer, provided that the following special provisions shall
apply:
|
|
(b)
|
Years of Benefit
Service
shall mean all of a Participant's Years of Service as an
Employee, provided, that notwithstanding the provisions of this Section
1.32, if a Participant retires or has a Break-in-Service and shall have
received all of his vested Accrued Benefit under the Plan, or the
Actuarial Equivalent thereof, and shall subsequently re-enter service,
service prior to such retirement or Break-in-Service shall be disregarded
for the purpose of determining Years of Benefit Service, subject to the
requirements of Article 10 being met (regarding reinstatement of Accrued
Benefits).
|
|
(c)
|
Years of Plan
Participation
- shall mean all of an Employee's Years of Service
while a Participant in this Plan. If a Participant's Accrued
Benefit is determined on the basis of Years of Plan Participation, and if
a Participant commences participation in the Plan on a date other than the
first day of a Plan Year, then all Hours of Service credited to the
Employee during the entire Plan Year, including Hours of Service credited
to the Employee for the portion of the Plan Year before the date on which
the Employee commences participation, shall be taken into account in
determining whether the Employee has 1,000 or more Hours of Service, and
therefore one Year of Plan
Participation.
|
|
(d)
|
Years of Vesting
Service
- For purposes of vesting, a "Year of
Vesting Service" is as defined in Section 1.32(a)
above. Service of any Employee who is a leased employee to any
employer aggregated under Code Section 414 (b), (c) or (m) must be
credited for vesting purposes whether or not such individual is eligible
to participate in the Plan. All service (subject to Section
10.2) of an Employee with the Employer must be taken into consideration
for purposes of determining such Employee's vesting percentage, excluding
the following service:
|
|
(i)
|
an
Employee’s Year of Service overlaps two vesting computation periods,
and
|
|
(ii)
|
the
Employee completed 1,000 Hours of Service in the twelve (12) consecutive
months beginning on his employment (or re-employment) commencement date
but fails to complete 1,000 Hours or more of Service in either of the
overlapping vesting computation periods,
and
|
|
(iii)
|
the
Employee becomes a Participant, then the Employee's Year of Service shall
also be considered a Year of Vesting Service at the time the Employee
becomes a Participant.
|
|
(3)
|
Military
Service
. Effective December 12, 1994, each Participant
will receive credit for Vesting Service as if his active Employment had
continued during the period of his military service with the Uniformed
Services of the United States of America; provided that he retains
statutory re-employment rights and
resumes
|
|
Employment
within 90 days after his honorable discharge from military duty, or during
any other period prescribed by law.
|
|
(e)
|
Notwithstanding
the preceding provisions of this Section 1.32, the Years of Service of any
Employee who terminates employment and is reemployed by the Employer shall
be determined in conjunction with Article 10
herein.
|
1.33
|
Social Security
Retirement Age
shall mean the age used as the retirement age for
the Participant under Section 216(l) of the Social Security Act, but
without regard to the age increase factor, and shall mean the age at which
the participant is entitled to receive unreduced Social Security Benefits,
and as if the early retirement age under Section 216(l)(2) of such Act
were age 62.
|
Year of Birth
|
Social Security Retirement
Age
|
|
1937
or earlier
|
65
years
|
|
1938
- 1954
|
66
years
|
|
1955
and after
|
67
years
|
1.34
|
Trustee
shall
mean the person, corporation, association, or combination of them, who
shall accept the appointment to execute the duties of the Trustee as
specifically set forth in any Trust Agreement entered into pursuant to the
Plan.
|
1.35
|
Vested
Interest
shall mean a nonforfeitable right to all or a
portion of the Accrued Benefit derived from Employer contributions made to
the Plan.
|
2.1
|
Requirements for
Participation
|
|
(a)
|
Leased
Employees, and
|
|
(b)
|
any
Employee of the Employer who is included in a unit of employees covered by
an agreement which the Secretary of Labor finds to be a collective
bargaining agreement between employee representatives and the Employer, if
there is evidence that retirement benefits were the subject of good faith
bargaining between such employee representatives and the Employer,
and
|
|
(c)
|
independent
contractors, the terms of whose bona fide employment contract does not
specifically provide for inclusion in this
Plan.
|
2.2
|
Transferred
Participants
|
|
(a)
|
A
Participant who is transferred to any Affiliated Employer which is not an
Employer as defined in Section 1.17 or to a class of employees not covered
by this Plan shall be considered a Transferred Participant. The
Accrued Benefit of such Transferred Participant shall be determined as of
the date of transfer and shall be held under the Plan until such time as
the Transferred Participant becomes eligible to receive it. If
such Transferred Participant is not fully vested in his Accrued Benefit as
of the date of transfer, such service after the date of transfer shall be
used in determining Years of Vesting Service. In no event,
however, shall service with the Affiliated Employer or in a class of
employees not covered by this Plan be used to accrue further benefits
under this Plan.
|
|
(b)
|
A
Participant whose employment changes to a class of employment which is not
covered by this Plan shall be considered a Transferred Participant and
shall be treated as described in Section 2.2(a)
above.
|
|
(c)
|
An
Employee, previously excluded from the Plan because he was a member of a
class of Employees excluded from the Plan, shall enter (or re-enter, as
the case may be) the Plan in the Plan Year during which he becomes a
member of the class of
|
3.1
|
Early Retirement
Benefit
- If a Participant terminates employment after his 55th
birthday but prior to his Normal Retirement Date, he shall be eligible
for
Early
Retirement, provided the Participant shall have completed fifteen (15)
Years of Vesting Service in the employ of the Employer. Monthly
benefit payments shall start, at the election of the Participant, on the
Early Retirement Date (defined below) or Normal Retirement Date or on the
first day of any intervening month, and the amount of such benefit shall
be determined as follows:
|
|
(a)
|
If
the payment of benefits commences at his Normal Retirement Date, the
amount of the benefit shall be the Participant's Accrued Benefit as of his
Early Retirement Date.
|
|
(b)
|
If
the payment of benefits commences prior to his Normal Retirement Date, the
amount of the benefit shall be the Participant's Accrued Benefit as of his
Early Retirement Date, reduced as
follows:
|
|
(c)
|
After
applying the reductions referred to in (b) immediately above, the net
Excess Percentage applicable to each year's accrual as referred to in
Section 4.2(a)(2) shall be tested to ensure that it does not exceed the
applicable maximum Excess Percentage as found in
Appendix
B
. To the extent necessary, the Excess Percentage only
shall be reduced to comply with the table in
Appendix
B
.
|
3.2
|
The
Early Retirement
Date
of a Participant who ceases to be an Employee shall be the
first day of the month coinciding with or next following the date such
Participant meets the requirements stated in the first paragraph
above.
|
3.3
|
The
Accrued Benefit of a Participant shall be 100% vested and nonforfeitable
on his Early Retirement Date.
|
3.4
|
A
terminated Participant who has met the service requirement for Early
Retirement, but who has not met the age requirement, upon satisfaction of
the age requirement will be eligible to receive his Accrued Benefit
appropriately reduced for early commencement of payments in accordance
with Section 3.1 above.
|
4.1
|
At
Normal Retirement Age each Participant shall have a 100% vested and
nonforfeitable right to his Normal Retirement
Benefit.
|
4.2
|
Amount of Normal
Retirement Benefit
- The amount of the monthly Normal Retirement
Benefit, payable as the Normal Annuity Form, shall be determined as
follows:
|
|
(a)
|
Determination of
Normal Retirement Benefit
- An amount equal to one-twelfth of the
sum of (1) plus (2) below:
|
|
(1)
|
Seventy-five
hundredths of one percent (.75%) of the Participant's "Final Average
Compensation," multiplied by his number of Years of Benefit Service,
subject to a maximum of forty (40) such years,
plus
|
|
(2)
|
sixty-five
hundredths of one percent (.65%) of the Participant's "Final Average
Compensation" in excess of the applicable Covered Compensation multiplied
by his number of Years of Benefit Service, subject to a maximum of
thirty-five (35) such years. The applicable Covered
Compensation table is defined as the current table in effect at the
beginning of the Plan Year in which termination of employment occurs, or
in which the accrual date falls. (
Appendix A
contains the
Covered Compensation table for the 2001 Plan Year. In the event
that the Covered Compensation table shall be revised by subsequent laws or
regulations, such table shall be deemed to be in effect for this Plan,
regardless of the values found in
Appendix
A
).
|
|
(a)
|
Minimum Normal
Retirement Benefit
- The minimum Normal Retirement Benefit of a
Participant shall be $20 per month.
|
|
(b)
|
The
Normal Retirement Benefit shall be equal to the greater of his Early
Retirement Benefit or his Normal Retirement Benefit at Normal Retirement
Age.
|
|
(c)
|
Final Average
Compensation
- A Participant's "Final Average Compensation"
is:
|
|
(1)
|
his
average annual Compensation for those five consecutive calendar years
during each of which he earned a Year of Benefit Service, within the last
ten calendar years in which he earned a Year of Benefit Service including
the current calendar year during each of which he worked as an Employee,
that produce the highest average,
or
|
|
(2)
|
his
average annual Compensation for all calendar years during which he earned
a Year of Benefit Service while an Employee if five or less
years.
|
4.3
|
Maximum Limitations on
Benefits
:
|
|
(a)
|
Defined Benefit Dollar
Limitation
- Notwithstanding any provision of the Plan to the
contrary, a Participant's benefit under the Plan shall not exceed the
maximum amount permitted under Code Section 415. For purposes
of determining the maximum amount permitted, Employee contributions, if
any, are treated as if contributed to a separate Defined Contribution
Plan.
|
|
(1)
|
$90,000,
adjusted for each Limitation Year by the Adjustment Factor to take into
account any cost-of-living increase provided for that year in accordance
with regulations prescribed by the Secretary of the
Treasury. Any such increase shall be applicable to former
employees as well as to Participants whose termination of employment has
not yet occurred,
|
|
or
|
|
(2)
|
100%
of the Participant's average compensation (as defined in Section 4.3(f)(1)
for the high three years. For purposes of this Section, a
Participant's high three years shall be the period of consecutive calendar
years (3, or all such years if less than 3) during which the Participant
was an active Participant.
|
|
(b)
|
Defined Benefit Dollar
Limitations Adjustments
- The Defined Benefit Dollar Limitation
shall be reduced for benefit commencement prior to the month of attainment
of the Participant's Social Security Retirement Age. The
reduction factor applicable to benefit payments commencing on or after age
62 is:
|
|
(c)
|
Adjustment of
Limitation for Years of Service
or Participation
.
|
|
(1)
|
Defined Benefit Dollar
Limitation Adjusted for Participation
. If a Participant
has completed less than ten (10) Years of
Plan
Participation
,
the Participant's Accrued Benefit shall not exceed the Defined Benefit
Dollar Limitation as adjusted by multiplying such amount by a fraction,
the numerator of which is the Participant's number of Years (or part
thereof) of Plan Participation, and the denominator of which is ten
(10).
|
|
(2)
|
Other Defined Benefit
Limitation Adjusted for Service
. If a Participant has
completed less than ten (10)
Years of
Service
with the Affiliated Employers, the limitations described in
Code Sections 415(b)(1)(B) and 415(b)(4) shall be adjusted by multiplying
such amounts by a fraction, the numerator of which is the Participant's
number of Years of Service (or part thereof), and the denominator of which
is ten (10).
|
|
(3)
|
Limitations of
Reductions
. In no event shall this Section reduce the
limitations provided under Code Sections 415(b)(1) and (4) to an amount
less than one-tenth of the applicable limitation (as determined without
regard to this Section 4.3(c).
|
|
(4)
|
Application to Changes
in Benefit Structure
. To the extent provided by the
Secretary of the Treasury, this Section 4.3(c) shall be applied separately
with respect to each change in the benefit structure of the
Plan.
|
|
(5)
|
Years
of Service shall include future years occurring before the Participant's
Normal Retirement Age. Such future years shall include the year
which contains the date the Participant reaches Normal Retirement Age, if
the Participant will receive a Year of Service for such
year.
|
|
(d)
|
Preservation of
Current Accrued Benefit Under Defined Benefit
Plan
.
|
|
(1)
|
In
General
. This Section 4.3(d) shall apply to Defined
Benefit Plans that were in existence on May 6, 1986, and that met the
applicable requirements of Code Section 415 as in effect for all
Limitation Years.
|
|
(2)
|
Protection of Current
Accrued Benefit
. If the Current Accrued Benefit of an
individual who is a Participant as of the first day of the Limitation Year
beginning on or after January 1, 1987, exceeds the benefit limitations
under Code Section 415(b) (as modified by Sections 4.3(b) and 4.3(c) of
this Plan), then, for purposes of Code Section 415(b) and (e), the Defined
Benefit Dollar
|
|
Limitation
with respect to such individual shall be equal to such Current Accrued
Benefit.
|
|
(e)
|
Special Rules for
Plans Subject to Overall Limitations Under Code Section
415(e)
.
|
|
(1)
|
Annual
Addition
. For purposes of computing the Defined
Contribution Plan Fraction of Code Section 415(e)(1), "Annual Addition"
shall mean the amount allocated to a Participant's account during the
Limitation Year as a result of:
|
|
(i)
|
Employer
Contributions,
|
|
(ii)
|
Employee
Contributions,
|
|
(iii)
|
Forfeitures,
and
|
|
(iv)
|
amounts
described in Sections 415(l)(2) and 419(e) of the
Code.
|
|
(2)
|
Recomputation Not
Required
. The Annual Addition for any Limitation Year
beginning before January 1, 1987 shall not be recomputed to treat all
Employee Contributions as an Annual
Addition.
|
|
(3)
|
Adjustment of Defined
Contribution Plan Fraction
. If the Plan satisfied the
applicable requirements of Section 415 of the Code as in effect for all
Limitation Years beginning before January 1, 1987, an amount shall be
subtracted from the numerator of the Defined Contribution Plan Fraction
(not exceeding such numerator) so that the sum of the Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction computed under Code
Section 415(e)(1) (as revised by this Section 4.3(e)) does not exceed 1.0
for such Limitation Year. Such amount to be subtracted shall be
an amount equal to the product of (a) and (b) where (a) is the sum of the
Defined Contribution Plan Fraction plus the Defined Benefit Plan Fraction
as of the Determination Date, minus one, and (b) is the denominator of the
Defined Contribution Plan Fraction as of the Determination
Date.
|
|
(f)
|
Special
Definitions
:
|
|
(1)
|
Compensation
-
The Participant's earned income, wages, salaries, fees for professional
service and other amounts received for personal services actually rendered
in the course of employment with the Employer maintaining the Plan
(including, but not limited to, commissions paid salesmen, compensation
for services on the basis of a percentage of profits, commissions on
insurance premiums, tips and bonuses). The term "Compensation"
shall not include:
|
|
(i)
|
Employer
contributions to a plan of deferred compensation to the extent the
contributions are not included in the gross income of the Employee for the
taxable year in which contributed, on behalf of an Employee to a
Simplified Employee Pension Plan described in Code Section 408(k) to the
extent such contributions are deductible by the Employee under Code
Section 219(b)(7), and any distributions from a plan of deferred
compensation, regardless of whether such amounts are includible in the
gross income of the Employee when
distributed.
|
|
(ii)
|
Amounts
realized from the exercise of a non-qualified stock option, or when
restricted stock (or property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture.
|
|
(iii)
|
Amounts
realized from the sale, exchange or other disposition of stock acquired
under a qualified stock option.
|
|
(iv)
|
Other
amounts which receive special tax benefits, such as premiums for group
term life insurance (but only to the extent that the premiums are not
includible in the gross income of the Employee), or contributions made by
an Employer (whether or not under a salary reduction agreement) towards
the purchase of an annuity contract described in Code Section 403(b)
(whether or not the contributions are excludible from the gross income of
the Employee). The provisions of this subparagraph
4.3(f)(1) shall apply solely to Section
4.3.
|
|
(v)
|
Notwithstanding
the above, effective for Limitation Years beginning after December 31,
1997, the term "Compensation" includes (1) an Employee's elective
deferrals under Code Section 402(g)(3), and (2) amounts contributed or
deferred under Code Section 125 or Code Section 457 by the Employer at the
Employee's election that are not otherwise includible in the Employee's
gross income, and for Limitation Years beginning after December 31, 2000,
Code Section 132(f).
|
|
(2)
|
Current Accrued
Benefit
shall mean the Accrued Benefit of a Participant
determined as if the Participant had separated from service as of the last
day of the Plan Year beginning before January 1, 1987 computed as a
straight life annuity (with no ancillary benefits), taking into account
the provisions of the Plan as it existed prior to January 1, 1987;
provided, that in computing a Participant's Current Accrued Benefit, no
amendments to the Plan adopted after May 5, 1986 which would affect such
benefit and no cost-of-living adjustments occurring after May 5, 1986
shall be taken into account.
|
|
(3)
|
Defined Contribution
Dollar Limitation
Effective for the first Limitation
Year beginning after December 31, 1994, shall mean the lesser of (i)
$30,000, adjusted for cost of living in accordance with Code Section
415(d), in multiples of $5,000 (or rounded to the next lowest multiple of
$5,000) or (ii) 25% of the Participant’s
Compensation.
|
|
(4)
|
Defined Benefit
Plan
- A retirement plan which does not provide for individual
accounts for Employer contributions. The Committee shall treat all Defined
Contribution plans (whether or not terminated) maintained by the Employer
as a single plan.
|
|
(5)
|
Defined Benefit Plan
Fraction
shall mean the following
fraction:
|
|
(i)
|
125%
multiplied by the dollar limitation in effect under Code Section
415(b)(1)(A) for the Limitation
Year,
|
|
(ii)
|
140%
multiplied by 100% of the Participant's Compensation Limitation under Code
Section 415(b)(1) for the Limitation Years (referred to as the "Defined
Benefit Compensation Limitation")
|
|
(6)
|
Defined Contribution
Plan Fraction
shall mean the following
fraction:
|
|
(i)
|
125%
multiplied by the Defined Contribution Dollar Limitation for Defined
Contribution Plans in effect under Code Section 415(c)(1)(A) for the
Limitation Year (determined without regard to the special Dollar
Limitations for Employee Stock Ownership
plans),
|
|
(ii)
|
140%
multiplied by 25% of the Participant's Compensation for the Plan Year
(referred to as the "Defined Contribution Compensation
Limitation").
|
|
(7)
|
Employer
- The
Employer that adopts this Plan. In the case of a group of
employers which constitutes a "
controlled
group
" of corporations (as defined in Code Section 414(b) as
modified by Code Section 415(h)); which constitutes trades or businesses
(whether or not incorporated) which are under "
common control
"
(as defined in Code Section 414(c) as modified by Code Section 415(h));
or, which constitutes an "
affiliated
service
" group within the meaning of Code Section 414(m), the
Committee shall consider all such employers as a single employer for
purposes of applying the limitations of this Section
4.3.
|
|
(8)
|
Limitation Year
- The period selected by the Employer under Section 1.23. All
qualified plans of the Employer must use the same Limitation
Year. If the Employer amends the Limitation Year to a different
twelve (12) consecutive month period, the new Limitation Year must begin
on a date within the Limitation Year for which the Employer makes the
amendment.
|
|
(9)
|
Projected Annual
Benefit
shall mean the annual Normal Retirement Benefit
payable in the form of a straight life annuity (with no ancillary
benefits) to which a Participant would be entitled under the terms of the
Plan if the following factors are
assumed:
|
|
(i)
|
the
Participant will continue employment with the Employer until he reaches
Normal Retirement Age (or until his then current age, if he has previously
reached age Normal Retirement Age),
|
|
(ii)
|
the
Participant's Compensation for the Limitation Year will remain the same
until the date the Participant attains Normal Retirement Age,
and
|
|
(iii)
|
all
other relevant factors used to determine benefits under the Defined
Benefit Plan for the Limitation Year will remain constant for all future
Limitation Years.
|
|
(10)
|
Defined Contribution
Plan
shall mean a retirement plan which provides for individual
accounts for Employer or Employee Contributions. The Committee
shall treat all Defined Contribution plans (whether or not terminated)
maintained by the Employer as a single
plan.
|
|
(g)
|
IRC Section 415
Incorporated by Reference
The preceding Sections 4.3(a)
through 4.3(f) are intended to comply with the provisions of Code Section
415 and the regulations thereunder. To the extent that there is
any discrepancy between this Section 4.3 and the Code and regulations, the
Code and regulations shall govern and are incorporated herein by
reference.
|
|
(h)
|
Any
Participant who is subject to Code Section 401(a)(17) shall have his
Accrued Benefit determined in accordance with Reg. 1.401(a)(17)-1(e), with
regard to the limit on compensation to be taken into account under the
Plan. The 401(a)(17) limit in effect at the beginning of the
calendar year during which the Plan Year begins shall be the limit for
that Plan Year.
|
5.1
|
A
Participant may retire later than his Normal
Retirement Date. In such
event:
|
|
(a)
|
A
Participant's Delayed Retirement Date shall be the first day of the month
coincident with or next following his last day of
employment. The amount of benefit to which the Participant
shall be entitled as of the date payments actually commence shall be equal
to the greater of:
|
|
(1)
|
his
Accrued Benefit calculated as of his Delayed Retirement Date, considering
his Final Average Compensation through his Delayed Retirement Date and his
total Years of Benefit Service as of such date,
or
|
|
(2)
|
his
Normal Retirement Benefit actuarially increased to his Delayed Retirement
Date.
|
|
(b)
|
The
benefit so determined in 5.1(a) above shall be of the Normal Annuity
Form. The Participant shall have the right, however, to elect
any other option pursuant to Article 9
herein.
|
|
(c)
|
Notwithstanding
a Participant's decision to remain in the employ of the Employer beyond
his Normal Retirement Date, payment of his retirement benefits shall
commence in accordance with Section 9.4(b) (for Plan Years beginning prior
to January 1, 1997), or 9.4(c) (for Plan Years beginning after December
31, 1996).
|
|
(d)
|
In
the event a Participant, who is covered by this Article 5, dies while
employed, the provisions of Article 7 shall apply with regard to the
availability and calculation of a death benefit, if
any.
|
6.1
|
Eligibility for
Disability Retirement
Benefits
|
|
(a)
|
A
Participant who is not yet eligible for Early Retirement under Article 3,
or Normal Retirement under Article 4, and who ceases to be an Employee due
to disability shall be eligible to receive a Disability Retirement Benefit
if:
|
|
(1)
|
a
Participant qualifies for any disability benefits sponsored by the
Employer under any existing Insured Disability Income Plan, or if no such
benefits are provided, then
|
|
(2)
|
a
Participant becomes unable to engage in any substantial gainful occupation
by reason of any physical or mental impairment which, on the basis of
competent medical opinion to the satisfaction of the Pension Committee,
meets the following requirements:
|
|
(i)
|
The
Participant has become totally disabled by bodily injury, disease or
mental disorder and is unable to perform any and every duty of any gainful
occupation for which he is reasonably fitted by training, education, or
experience, and
|
|
(ii)
|
Such
disability has continued for a period of six consecutive months and will
be permanent and continuous for the remainder of the Participant's
lifetime.
|
|
(3)
|
For
purposes of this Plan, however, no Participant shall be deemed totally and
permanently disabled if his disability results from chronic alcoholism,
addiction to narcotics, injury incurred while engaging in any illegal or
felonious enterprise, intentionally self-inflicted injury, or injury
incurred while serving in the armed forces of any
country.
|
|
(4)
|
The
Employer may require proof of continued disability from time to time, but
not more frequently than once in any six (6) month
period.
|
|
(b)
|
The
Disability Retirement Date of a Participant shall be the first day of the
month coinciding with or next following the date a Participant meets the
requirements of Section 6.1(a)
above.
|
6.2
|
Payment of Disability
Benefit
|
|
(a)
|
Disability
Benefit Payments shall be payable commencing on any
date elected by the Participant, but not before the six month period
referred to in Section 6.1(a) has expired, and not later than what would
have been such Participant's Normal Retirement Date had he not become
disabled. The Participant's disability benefit shall be payable
in accordance with any option elected pursuant to Article 9 herein,
provided, however, that any such benefit shall cease upon the first to
occur of the following events:
|
|
(1)
|
the
date the Participant is deemed to be no longer permanently and totally
disabled,
|
|
(2)
|
the
date the Participant refuses to submit to a medical examination or refuses
to furnish due proof of continued
disability,
|
|
(3)
|
the
date of the Participant's death, unless the option elected by the
Participant pursuant to Article 9 provides for the continuation of
payments to a surviving spouse or other beneficiary,
or
|
|
(4)
|
the
date the Participant attains his Normal Retirement Age, at which time such
Participant shall be deemed to be a retired Participant no longer required
to furnish proof of disability. Any benefit being paid to a
disabled Participant who reaches Normal Retirement Age shall continue as
if the Participant had elected such benefit at his Normal Retirement
Date.
|
|
(b)
|
The
amount of such benefit shall be determined as
follows:
|
|
(1)
|
Once
a Participant is determined to be totally and permanently disabled, his
Accrued Benefit shall become 100% vested and
nonforfeitable.
|
|
(2)
|
If
the payment of benefits commences at Normal Retirement Date, the amount of
the benefit shall be the Participant's Accrued Benefit as of his
Disability Retirement Date.
|
|
(3)
|
If
the payment of benefits commences prior to Normal Retirement Date, the
amount of the benefit shall be the Participant's Accrued Benefit as of his
Disability Retirement Date, reduced as
follows:
|
6.3
|
Cash-out of Small
Benefits
- The provisions of Section 6.2 notwithstanding, if the
Actuarially Equivalent lump sum present value of the disability benefit
determined (at the time distribution commences) for any disabled
Participant shall be $5,000 or less ($3,500 or less for Plan Years
beginning on or before August 5, 1997), then such lump sum shall be paid
directly to such disabled
Participant.
|
6.4
|
Recovery from
Disability
|
|
(a)
|
If,
prior to his Normal Retirement Date, a Participant is deemed to be no
longer permanently and totally disabled prior to his Normal Retirement
Date and returns to the service of the Employer within one month of such
determination or recovery, then the Participant shall be deemed not to
have incurred a Break in Service. The number of years and
fractions thereof during which he received payments pursuant to this
Article shall not be counted in determining his Years of Service for any
purposes under the Plan. Disability payments shall nonetheless
cease in accordance with Section
6.2(a).
|
|
(b)
|
If,
prior to his Normal Retirement Date, a Participant is deemed to be no
longer permanently and totally disabled and he does not return to the
service of the Employer within one month of such determination or
recovery, then he shall be deemed to have separated from the service of
the Employer as of the date he became permanently and totally
disabled. In this event, the provisions of Section 6.2(a) shall
apply, and benefit payments shall
cease.
|
7.1
|
Eligibility for
Preretirement Death Benefits
|
|
(a)
|
In
the event a Participant dies (i) before becoming vested in any benefit
provided by this Plan or (ii) without a surviving Eligible Spouse, there
shall be no death benefit from this
Plan.
|
|
(b)
|
In
the event a vested Participant dies before reaching his "Earliest
Retirement Age," a death benefit in the form of a Qualified Preretirement
Survivor Annuity shall be paid to his surviving Eligible Spouse, unless
the conditions of Section 7.4 have been met regarding optional forms of
benefit. In the event there is no surviving Eligible Spouse no
benefit shall be paid hereunder.
|
|
(c)
|
In
the event a vested Participant dies after reaching his "Earliest
Retirement Age," a death benefit in the form of a Qualified Joint and
Survivor annuity shall be paid to his surviving Eligible Spouse, unless
the conditions of Section 7.4 have been met regarding optional forms of
benefit.
|
7.2
|
Determination of
Preretirement Death Benefits
|
|
(a)
|
For
a Participant who meets the requirements of Section 7.1(b) above, unless
an optional form of benefit is selected within the Election Period
pursuant to a Qualified Election, a
Qualified
Preretirement Survivor Annuity
shall be determined as
follows:
|
|
(1)
|
the
Participant will be deemed to have separated from service on the date of
death;
|
|
(2)
|
survived
to the Earliest Retirement Age;
|
|
(3)
|
retired
with an immediate Qualified Joint and 50% Survivor Annuity at the Earliest
Retirement Age; and
|
|
(4)
|
died
on the day after the Earliest Retirement
Age.
|
|
(b)
|
For
a Participant who meets the requirements of Section 7.1(c) above, unless
an optional form of benefit is selected within the Election Period
pursuant to a Qualified Election, the Participant's surviving Eligible
Spouse (if any) will receive the same benefit that would be payable if the
Participant had retired with an immediate Qualified Joint and 50% Survivor
Annuity on the day prior to his
death.
|
|
(c)
|
Notwithstanding
the provisions of Sections 7.2(a) and 7.2(b) above, if the Actuarial
Equivalent present value (at the time distribution commences) of
the
|
|
(a)
|
If
the Participant dies after distribution of his interest has commenced, the
remaining portion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being used prior to
the Participant's death.
|
|
(b)
|
If
the Participant dies before distribution of his interest commences, then,
subject to Sections 7.1(b) or 7.1(c) as applicable, the Participant's
entire interest will be distributed no later than five (5) years after the
Participant's death except to the extent that an election is made to
receive distributions in accordance with (1) or (2)
below:
|
|
(1)
|
If
any portion of the Participant's interest is payable to a designated
Beneficiary, distributions may be made in substantially equal installments
over the life or life expectancy of the designated Beneficiary commencing
no later than one (1) year after the Participant's
death;
|
|
(2)
|
If
the designated Beneficiary is the Participant's surviving Eligible Spouse,
the date distributions are required to begin in accordance with (1) above
shall not be earlier than the date on which the Participant would have
attained age 70 1/2, and, if the Eligible Spouse dies before payments
begin, subsequent distributions shall be made as if the Eligible Spouse
had been the Participant.
|
|
(c)
|
For
purposes of (b) above, payments that are to be made in installments over a
specified period of time will be calculated by use of the return multiples
specified in Section 1.72-9 of the regulations. Life expectancy
of a surviving Spouse may be recalculated annually; however, in the case
of any other designated Beneficiary, such life expectancy will be
calculated at the time payment first commences without further
recalculation.
|
|
(d)
|
For
purposes of (a), (b) and (c) above, any amount paid to a minor child of
the Participant will be treated as if it had been paid to the surviving
Eligible Spouse if the amount becomes payable to the surviving Eligible
Spouse when the child reaches the age of
majority.
|
7.4
|
Definitions
.
|
|
(a)
|
Election Period (for
Qualified Preretirement Survivor Annuity):
The period
which begins on the first day of the Plan Year in which the Participant
attains age 35 and ends on the date of the Participant's
death. If a Participant separates from service prior to the
first day of the Plan Year in which age 35 is attained, with respect to
benefits accrued prior to separation, the Election Period shall begin on
the date of separation.
|
|
(b)
|
Earliest Retirement
Age:
The earliest date on which, under the Plan, the
Participant could elect to receive retirement benefits. For
this purpose, if a Participant dies prior to meeting the service
requirement, if any, for eligibility for early retirement, then his
Earliest Retirement Age shall be his Normal Retirement
Age.
|
|
(c)
|
Qualified
Election
: A waiver of a Qualified Joint and Survivor Annuity or a
Qualified Preretirement Survivor Annuity. Any waiver of a
Qualified Joint and Survivor Annuity or a Qualified Preretirement Survivor
Annuity shall not be effective unless: (1) the Participant's
Eligible Spouse consents in writing to the election; (2) the election
designates a specific alternate beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not be changed
without Spousal consent (or the Eligible Spouse expressly permits
designations by the Participant without any further Spousal consent; (3)
the Spouse's consent acknowledges the effect of the election; and (4) the
Spouse's consent is witnessed by a Plan representative or notary
public. Additionally, a Participant's waiver of the Qualified
Joint and Survivor Annuity will not be effective unless the election
designates a form of benefit payment under Article 9 which may not be
changed without Spousal consent (or the Spouse expressly permits
designations by the Participant without any further Spousal
consent). If it is established to the satisfaction of a Plan
representative that such written consent may not be obtained because there
is no Spouse or the Spouse cannot be located, a waiver will be deemed a
qualified election.
|
7.5
|
Notice
Requirements
.
|
|
(a)
|
In
the case of a
Qualified Joint and
Survivor Annuity
as described in Section 1.30, the Plan
Administrator shall provide each Participant no less than 30 days and no
more than 90 days prior to the commencement of benefits, a written
explanation of:
|
|
(1)
|
the
terms and conditions of a Qualified Joint and Survivor
Annuity;
|
|
(2)
|
the
Participant's right to make and the effect of an election to waive a
Qualified Joint and Survivor Annuity form of
benefit;
|
|
(3)
|
the
rights of a Participant's Eligible
Spouse;
|
|
(4)
|
the
right to make, and the effect of, a revocation of a previous election to
waive the Qualified Joint and Survivor Annuity;
and
|
|
(5)
|
the
relative values of the various optional forms of benefit under the
Plan.
|
|
(b)
|
In
the case of a
Qualified
Preretirement Survivor Annuity
as described in Section 7.2 of this
Article, the Plan Administrator shall provide each Participant within the
"applicable period" for such Participant, a written explanation of the
Qualified Preretirement Survivor Annuity in such terms and in such manner
as would be
|
|
(c)
|
Notwithstanding
the other requirements of this Section 7.5, the respective notices
prescribed by this Section need not be given to a Participant if this Plan
"fully subsidizes" the costs of a Qualified Joint and Survivor Annuity or
Qualified Preretirement Survivor Annuity and if the Participant is not
permitted to waive either form of benefit described above or select a
nonspouse beneficiary. For purposes of this Section 7.5(c), a
Plan fully subsidizes the costs of a benefit if under the Plan the failure
to waive such benefit by a Participant would not result in a decrease in
any plan benefits with respect to such Participant and would not result in
increased contributions from the
Participant.
|
7.6
|
Transitional Rules
(Terminated Vested
Participants)
|
|
(a)
|
Any
living Participant not receiving benefits on August 23, 1984, who would
otherwise not receive the benefits prescribed by the previous Sections of
this Article 7, must be given the opportunity to elect to have the prior
Sections of this Article apply if such Participant is credited with at
least one Hour of Service under this Plan or a Predecessor Plan in a Plan
Year beginning on or after January 1, 1976, and such Participant had at
least 10 Years of Service when he separated from
service.
|
|
(b)
|
Any
living Participant not receiving benefits on August 23, 1984, who was
credited with at least one Hour of Service under this Plan or a
Predecessor Plan on or after September 2, 1974, and who is not otherwise
credited with any service in a Plan Year beginning on or after January 1,
1976, must be given the opportunity to have his benefits paid in
accordance with Section 7.6(d) of this
Article.
|
|
(c)
|
The
respective opportunities to elect (as described in Sections 7.6(a) and
7.6(b) above) must be afforded to the appropriate Participants during the
period commencing on August 23, 1984, and ending on the date benefits
would otherwise commence to said
Participants.
|
|
(d)
|
Any
Participant who has elected pursuant to Section 7.6(b) of this Article and
any Participant who does not elect under Section 7.6(a) or who meets the
requirements of Section 7.6(a) except that such Participant does not have
at least 10 Years of Service when he separates from service, shall have
his benefits distributed in accordance with all of the following
requirements if benefits would have been payable in the form of a life
annuity:
|
|
(1)
|
Automatic Joint and
Survivor Annuity
- If benefits in the form of a life annuity become
payable to a
married
Participant who:
|
|
(i)
|
begins
to receive payments under the Plan on or after Normal Retirement Age;
or
|
|
(ii)
|
dies
on or after Normal Retirement Age while still working for the Employer;
or
|
|
(iii)
|
begins
to receive payments on or after the Qualified Early Retirement Age;
or
|
|
(iv)
|
separates
from service on or after attaining Normal Retirement Age (or the Qualified
Early Retirement Age) and after satisfying the eligibility requirements
for the payment of benefits under the Plan and thereafter dies before
beginning to receive such benefits;
|
|
(2)
|
Election of Early
Survivor Annuity
- a Participant who is employed after attaining
the Qualified Early Retirement Age will be given the opportunity to elect,
during the Election Period to have a survivor annuity payable on
death. If the Participant elects the survivor annuity, payments
under such annuity must not be less than the payments which would have
been made to the spouse under the Qualified Joint and Survivor Annuity if
the Participant had retired on the day before his death. Any
election under this provision will be in writing and may be changed by the
Participant at any time. The Election Period begins on the
later of:
|
|
(i)
|
the
90th day before the Participant attains the Qualified Early Retirement
Age, or
|
|
(ii)
|
the
date on which participation begins, and ends on the date the Participant
terminates employment.
|
|
(3)
|
For
purposes of this Section 7.6(d):
|
|
(i)
|
Qualified Early
Retirement Age
is the
latest
of:
|
|
(a)
|
the
earliest date, under the Plan, on which the Participant may elect to
receive retirement benefits,
|
|
(b)
|
the
first day of the 120th month beginning before the Participant reaches
Normal Retirement Age, or
|
|
(c)
|
the
date on which the Participant begins
Participation.
|
|
(ii)
|
Qualified Joint and
Survivor Annuity
is as defined in Section
1.30.
|
7.7
|
Beneficiary
- A
Participant or former Participant electing an optional form of benefit
which may become payable after his death in a lump sum, or for a period
determined without reference to the duration of any person's life, may
designate in writing one or more direct or contingent beneficiaries on
forms supplied by the Committee. However, in order for a
married Participant to name a beneficiary other than his Eligible Spouse,
he must comply with Section 7.4(c). A Participant or former
Participant may change his designation at any time in the same
manner. Any portion of a Participant's or former Participant's
death benefit which is not disposed of under a designation of beneficiary
for any reason whatsoever shall be paid in the following
order:
|
|
(a)
|
to
his Spouse, if living, otherwise
|
|
(b)
|
his
natural or adopted children and survivors thereof, in equal shares per
stirpes, otherwise
|
|
(c)
|
his
parents and survivor thereof, in equal shares,
or
|
|
(d)
|
his
executors or administrators.
|
7.8
|
Notwithstanding
any provision of this Article 7 to the contrary, any death benefit
provided herein shall be an "incidental" benefit within the meaning of
Reg. 1.401-1(b) and any amendments thereto. For the purpose of
complying with this Section, a Qualified Preretirement Survivor Annuity
shall always be an incidental
benefit.
|
8.1
|
Nonforfeitable
Rights
- Notwithstanding any other provisions of this Article, a
Participant's Accrued Benefit shall be 100% vested and nonforfeitable upon
such Participant's attaining Normal Retirement Age or, if earlier, upon
his becoming totally and permanently disabled pursuant to Article 6
herein.
|
8.2
|
Terminated Participant
- Vesting Schedule
- In the event a Participant
terminates his employment for any reason other than for disability or
retirement, he shall be considered a terminated
Participant. Such terminated Participant shall have a vested
right to a portion of his Accrued Benefit funded by the Employer based on
his Years of Vesting Service at his date of termination. The
amount of his Vested Accrued Benefit shall be a percentage of his Accrued
Benefit accrued at date of termination of employment as determined by the
following schedule:
|
Years of Vesting Service
|
Vesting Percentage
|
|
Less
than 5 years
|
0%
|
|
5
years or more
|
100%
|
8.3
|
The facts concerning
the termination of a Participant's employment
shall be transmitted
to the Committee of the Plan by written statement from the Employer, and
the Committee may accept such statement as true. The Committee
shall not incur any liability by reason of any action taken or omitted on
the strength of such statement.
|
8.4
|
Normal Method and Time
of Payment - Vested Benefit
- No payment or distribution of a
vested benefit shall occur until the Participant terminates
employment. If a termination of employment does occur, then his
vested Accrued Benefit shall be deferred with the first payment to
commence on:
|
|
(a)
|
his
Normal Retirement Date, or
|
|
(b)
|
if
the terminated Employee had met the Years of Service requirement for Early
Retirement under the Plan, then at his election payments of the annuity
may commence once he meets the age requirement for Early Retirement,
subject to the early retirement reduction factors as provided in Section
3.1(b).
|
8.5
|
Restoration of Accrued
Benefits
- If a Participant receives a distribution pursuant to
this Section and the Participant resumes covered employment under the
plan, he shall have the right to restore his Employer-provided Accrued
Benefit (including all optional forms of benefits and subsidies relating
to such benefits) to the extent forfeited upon the repayment to the Plan
of the full amount of the distribution plus interest, compounded annually
from the date of distribution at the rate determined for purposes of Code
section 411(c)(2)(C). Such repayment must be made before the
earlier of five years after the first date on which the Participant is
subsequently reemployed by the Employer, or the date the Participant
incurs 5 consecutive 1-year Breaks in Service following the date of
distribution.
|
8.6
|
No Divestment for
Cause
- Under no circumstances shall a Participant be divested of
any benefits for cause.
|
9.1
|
At
a Participant's Disability, Early, Normal or Delayed Retirement Date,
benefits shall be provided him
in accordance with
this Plan. Such benefits shall be provided from the Plan
assets. Any annuity contract distributed to a retiring
Participant from the Plan shall contain the word
"nontransferable."
|
9.2
|
The
retirement benefit, with respect to a Participant who has been married
throughout the one year period ending on his Annuity Starting Date, shall
be payable under the form of the Qualified Joint and Survivor Annuity with
50% continuation as described in Section 1.30, subject to the
following:
|
|
(a)
|
Such
retirement benefit shall be the Actuarial Equivalent of the "Normal
Annuity Form" of retirement
benefit.
|
|
(b)
|
The
Participant's Eligible Spouse shall be designated as the contingent
annuitant.
|
|
(c)
|
In
lieu of this form of payment, a Participant (and his Eligible Spouse) may,
prior to his actual retirement date, elect in writing (after having
received a written explanation of the terms and conditions of the survivor
annuity described in Section 7.5 of this Plan
and the effect of
an election under this subsection) to have his retirement benefit payable
under any one of the other forms of retirement benefits or annuity options
provided under the Plan. In order to elect out of a Qualified
Joint and Survivor Annuity, the Participant and his Eligible Spouse must
consent to the election. The normal form annuity cannot be waived after
the commencement of benefits.
|
9.3
|
Optional Forms of
Benefit Payment
- Subject to Section 9.2 above and the
limitations set forth in paragraph (e) below, a retiring Participant may
elect to receive his retirement benefits under any one of the following
forms:
|
|
(a)
|
A
life annuity, with no more payments after death of the
Participant.
|
|
(b)
|
A
life annuity providing for 120, 180 or 240 minimum guaranteed monthly
payments.
|
|
(c)
|
Any
Qualified Joint and Survivor Annuity (as defined in Section 1.30) of
either 50%, 75% or 100%.
|
|
(d)
|
A
lump sum payment of the Actuarial Equivalent of a Participant's retirement
benefit provided such lump sum (determined at the time distribution
commences) does not exceed $5,000. Notwithstanding the
preceding sentence, for Plan Years beginning on or before August 5, 1997,
any lump sum Actuarial Equivalent in excess of $3,500 shall not be
distributed without the written consent of the Participant and the
Participant's Eligible Spouse.
|
|
(e)
|
Limitation on
Settlement Options
:
|
|
(1)
|
The
provisions of this Plan shall be subject to the limitation that no
Participant shall, prior to his retirement, elect an interest only
option. Distributions, if not made in a lump sum, may only be
made over one of the following periods (or a combination
thereof):
|
|
(i)
|
the
life of the Participant,
|
|
(ii)
|
the
life of the Participant and a designated
Beneficiary,
|
|
(iii)
|
a
period certain not extending beyond the life expectancy of the
Participant, or
|
|
(iv)
|
a
period certain not extending beyond the joint and last survivor expectancy
of the Participant and a designated
Beneficiary.
|
|
(2)
|
A
Participant may not elect an optional form of benefit which provides
monthly benefits to his Eligible Spouse, or to a Beneficiary, unless the
actuarial value of the payments expected to be made to the Participant at
the time the payment is to commence is more than 50% of the actuarial
value of the total payments expected to be made under such optional
form. In no event, however, can the amount of each monthly
payment to a contingent annuitant or Beneficiary exceed that payable to
the Participant.
|
|
(3)
|
Distributions
from the Plan will be made in accordance with the requirements of the
regulations under Code Section 401(a)(9) including the minimum
distribution incidental benefit requirements of Section 1.401(a)(9)-2 of
the proposed regulation.
|
9.4
|
Time of Payment of
Benefits
|
|
(a)
|
Unless
a Participant elects otherwise, payment of benefits must begin no later
than 60 days after the close of the Plan Year in which the
latest
of the
following events occurs:
|
|
(1)
|
the
Participant's attainment of age 65 or earlier Normal Retirement Age
specified under the Plan,
|
|
(2)
|
the
termination of the Participant's service with the
Employer.
|
|
(b)
|
Age 70½ Distributions
(prior to January 1, 1997)
: Section 9.4(a)(2) notwithstanding,
payment of the Accrued Benefit of a Participant must commence no later
than the first day of April following the calendar year in which the
Participant attains age 70½.
|
|
(c)
|
Age 70½ Distributions
(effective for Plan Years beginning after December 31, 1996
),
subject to the provisions of Section
9.2.
|
9.5
|
Suspension of
Benefits
- If a Participant who is currently receiving monthly
retirement payments returns to work for the Employer, and works for
two hundred and
fifty (250) or more Hours of Service during a calendar quarter, then any
such monthly retirement payments shall be suspended. The period
of suspension shall continue until such Participant again terminates his
employment. At that time, benefit payments shall resume and
shall be in the amount originally computed, unless the Participant's
employment was sufficient to give him additional Years of Benefit
Service. If the Participant shall earn additional Years of
Benefit Service, then his benefit shall be recomputed as of his subsequent
termination date, taking into account all of his Years of Benefit Service,
but shall be adjusted actuarially to reflect any benefits previously
received.
|
9.6
|
Missing Persons
- The administrator shall direct the Trustee to make a reasonable effort
to locate all persons entitled to benefits under the Plan; however,
notwithstanding any provisions in the Plan to the contrary, if, after a
period of five (5) years from the date such benefit shall be due, any such
persons entitled to benefits have not been located, their rights under the
Plan shall become suspended. Before this provision
becomes operative, the Trustee shall send a certified letter to all such
persons at their last known
addresses
|
|
advising
them that their interest or benefits under the Plan shall be
suspended. Any such suspended amounts shall be held by the
Trustee for a period of three (3) additional years (or a total of eight
(8) years from the time the benefits first become payable), provided,
however, that if a person subsequently makes a valid claim with respect to
such suspended benefits, his right to benefits shall be
reinstated. Any such suspended amounts shall be handled in a
manner not inconsistent with regulations issued by the Internal Revenue
Service and Department of Labor.
|
10.1
|
Eligibility for
Participation
:
|
|
(a)
|
No "Break-in-Service"
has occurred
|
|
(1)
|
If
a terminated Participant resumes employment before a Break-in-Service, he
shall re-enter the Plan on his re-employment date, regardless of whether
he had a vested benefit or not.
|
|
(2)
|
If
an Employee terminates employment during his initial Eligibility
Computation Period and returns to work after the first date on which he
would otherwise have become a Participant in the Plan, but prior to
incurring a Break-in-Service, such Employee shall become a Participant on
his date of re-employment, provided that he had completed 1,000 or more
Hours of Service prior to his termination of employment. If
such Employee shall not have completed 1,000 or more Hours of Service
prior to his termination of employment, his Eligibility Computation Period
shall shift to the Plan Year which overlaps his initial employment year
for purposes of measuring Hours of Service for eligibility to
participate.
|
|
(b)
|
"Break-in-Service" has
occurred
|
|
(1)
|
General Rule (Vested
or Non-Vested Participant)
- All Years of Service preceding a Break
in Service shall be taken into account in computing an Employee's
Qualifying Years of Service. However, he will be required to
complete one Year of Service, computed from date of re
-
employment, before
combining post-break and pre-break service. Upon the completion
of a Year of Service measured from his date of re-employment, he will
participate retroactively as of his date of
re-employment.
|
|
(2)
|
Exception to the
General Rule
- In the case of an Employee who does
not
have a
Vested Interest in his Accrued Benefit, Years of Service preceding a Break
in Service shall not be taken into account in computing an Employee's
eligibility to participate in the Plan if the number of consecutive 1-Year
Breaks in Service equals or exceeds the greater of (a) five (5)
consecutive 1-Year Breaks in Service, or (b) the aggregate number of Years
of Service earned before the consecutive Breaks in
Service. Furthermore, the "aggregate number of Years of Service
preceding the Break in Service" shall not include Years of Service which
were not required to be taken into account under this Section by reason of
any prior Break in Service.
|
10.2
|
Vesting upon
Re-Employment
|
|
(a)
|
Vesting on
Re-Employment Before a Break in Service
- There is no effect on
vesting if a Participant returns to work before a Break in Service
occurs.
|
|
(b)
|
Vesting on
Re-Employment after a Break in
Service
|
|
(1)
|
General Rule (Vested
or Non-Vested Participant)
- Years of Service preceding a
Break-in-Service shall be taken into account in computing an Employee's
Years of Vesting Service. However, the Employee will be
required to complete one Year of Service before combining post-break and
pre-break service.
|
|
(2)
|
Exception to the
General Rule
- In the case of an Employee who does not have a
Vested Interest in his Accrued Benefit, Years of Service preceding a
Break-in-Service shall not be taken into account in computing an
Employee's vested benefits in the Plan if the number of consecutive 1-Year
Breaks in Service equals or exceeds the greater of (a) five (5)
consecutive 1-Year Breaks in Service, or (b) the aggregate number of Years
of Service earned before the consecutive Breaks in
Service. Furthermore, the aggregate number of Years of Service
preceding the Break-in-Service shall not include Years of Service which
were not required to be taken into account under this Section by reason of
any prior Break-in-Service.
|
10.3
|
Loss of Accrued
Benefits if Employee has Received a
Distribution
|
|
(a)
|
Involuntary
Cash-Outs
- For purposes of determining an Employee's Accrued
Benefit derived from Employer contributions under a Plan, the Plan may
disregard service performed by the Employee with respect to
which:
|
|
(1)
|
The
Employee received a distribution of the present value of his entire
nonforfeitable benefit,
|
|
(2)
|
The
portion of such distribution which is attributable to the present value of
the Employer-derived Accrued Benefit is not in excess of $5,000 ($3,500
for Plan Years beginning before August 5,
1997).
|
|
(3)
|
The
distribution is made due to the termination of the Employee's
participation in the Plan.
|
|
(b)
|
Voluntary
Cash-Outs
- For purposes of determining an Employee's Accrued
Benefit derived from Employer contributions under the Plan, the Plan may
disregard service performed by the Employee with respect to
which:
|
|
(1)
|
The
Employee receives a distribution of the present value of his entire
nonforfeitable benefit attributable to such
service,
|
|
(2)
|
The
Employee voluntarily elects to receive such distribution and
the Participant's
Spouse consents to such election, in accordance with Section 9.2,
and
|
|
(3)
|
The
distribution is made on termination of the Employee's participation in the
Plan.
|
10.4
|
Plan Repayment
Provisions
- If a Participant elects to have his Accrued Benefit,
including all optional forms of benefits and subsidies relating to such
benefits, restored based on service prior to a cash-out, he must repay the
amount of the distribution, plus interest, to the Fund, before the earlier
of (a) five (5) years after the first date on which the Participant is
subsequently reemployed by the Employer, or (b) the date the Participant
incurs five (5) consecutive 1-Year Breaks-in-Service following the date of
distribution. In order for repayment to be permitted, the
following conditions must be met:
|
|
(a)
|
The
Participant must not have been 100% vested when he terminated and received
a cash-out payment;
|
|
(b)
|
The
Participant must resume employment such that he will earn at least 1,000
Hours of Service during any Plan
Year;
|
|
(c)
|
The
Participant must repay the amount of the cash-out payment with
interest:
|
|
(1)
|
Interest
is charged at the rate of 5% per year up to the Plan Year which begins in
1988;
|
|
(2)
|
On
and after the Plan Year beginning in 1988, interest is charged and
compounded annually at the rate determined for purposes of Code Section
411(c)(2)(C).
|
|
(d)
|
The
cash-out payment with interest must be repaid by the end of what would
have been the fifth "Break in Service" year, had the Participant not been
rehired, or if later, the fifth anniversary of his date of
rehire.
|
10.5
|
Distribution
-
For purposes of this Article 10, a distribution shall be made in a lump
sum.
|
11.1
|
General
Rule
. Notwithstanding any provision herein to
the contrary, for any Plan Year beginning after December 31, 1983, in
which this Plan is determined to be a Top-Heavy Plan, the provisions of
this Article 11 shall supersede any conflicting provision in the
Plan.
|
11.2
|
Definitions
. For
purposes of applying the provisions of this Article 11, and any other
provisions of this Plan, the following definitions shall
apply:
|
|
(a)
|
"
Compensation
"
shall have the same meaning as is set forth under Section 1.11 of the Plan
and shall be limited under Code Section
401(a)(17).
|
|
(b)
|
"
Determination
Date
" for any Plan Year is the last day of the preceding Plan Year
or, in the case of the first Plan Year of the Plan, the last day of that
Plan Year. The present value of an Accrued Benefit as of the
Determination Date is determined as of the most recent valuation date
which is within the 12 month period ending on the Determination
Date. The assumptions used to determine the present value are
those as found in Section 1.2.
|
|
(c)
|
Key
Employee
: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during any Plan Year
contained in the determination period
was:
|
|
(1)
|
an
officer of the Employer whose annual Plan Year earnings exceed 50% of the
annual benefit limit for defined benefit plans, as indexed, pursuant to
Code Section 415(b)(1)(A) for the calendar year in which such Plan Year
ends,
|
|
(2)
|
one
of the ten employees having annual compensation from the Employer for a
Plan Year greater than the Defined Contribution Dollar Limitation in
effect under Section 415(c)(1)(A) of the Code for the calendar year in
which such Plan Year ends and owning (or considered as owning within the
meaning of Section 318 of the Code) both more than 1/2 percent interest
and the largest interests in the
Employer,
|
|
(3)
|
a
five percent Owner of the Employer,
or
|
|
(4)
|
a
one percent Owner of the Employer who has an annual Plan Year compensation
of more than $150,000.
|
|
(d)
|
Non-Key
Employee
is an employee who does not meet the definition
of Key Employee.
|
|
(e)
|
Permissive Aggregation
Group
is the Required Aggregation Group, plus any other
qualified plan or plans maintained by the Employer, but only if such plans
as a group would satisfy in the aggregate the requirements of Code Section
401(a)(4) and Code Section 410. The Employer shall determine
which plans to take into account in determining the Permissive Aggregation
Group.
|
|
(f)
|
Required Aggregation
Group means
:
|
|
(1)
|
Each
qualified plan of the Employer in which at least one (1) Key Employee
participates; and
|
|
(2)
|
Any
other qualified plan of the Employer which enables a plan described in (1)
above to meet the requirements of Code Section 401(a)(4) or Code Section
410.
|
11.3
|
Determination of
"Top-Heavy" Status.
|
|
(a)
|
If
this Plan is the only qualified plan maintained by the Employer, the Plan
is "top-heavy" for a Plan Year if the top-heavy ratio as of the
Determination Date exceeds sixty percent
(60%).
|
|
(b)
|
If
the Employer maintains other qualified plans (including a Simplified
Employee Pension plan) this Plan is top-heavy only if it is part of the
Required
Aggregation Group
, and the top-heavy ratio for the Required
Aggregation Group exceeds sixty percent (60%). If such Required
Aggregation Group is top-heavy, but an applicable Permissive Aggregation
Group results in a ratio of 60% or less, this Plan shall not be top-heavy
for such Plan Years upon such application,
provided
|
|
(c)
|
Solely
for the purpose of determining if this Plan, or any other plan included in
a Required or Permissive Aggregation Group of which this Plan is a part,
is Top-Heavy (within the meaning of Section 416(g) of the Code) the
Accrued Benefit of an Employee other than a Key Employee (within the
meaning of Section 416(i)(1) of the Code) shall be determined under (a)
the method, if any, which is used for accrual purposes under all plans
maintained by the Affiliated Employers, or (b) if there is no such method,
as if such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rate of Section 411(b)(1)(C) of the
Code.
|
11.4
|
Minimum Accrued
Benefit.
|
|
(a)
|
If
this Plan is "top-heavy" in any Plan Year beginning after December 31,
1983, the Employer guarantees a Non-Key Employee who is a Participant
during the Plan Year and completes 1,000 Hours of Service, a minimum
accrued benefit; provided, however, the minimum accrual provided herein
applies even though the Non-Key Employee is not employed by the Employer
on the last day of the Accrual of Benefit Computation Period or the Plan
is integrated with Social Security. For purposes of this
paragraph, a Non-Key Employee Participant includes any Employee otherwise
eligible to participate in the Plan but who is not a Participant because
his Compensation does not exceed a specified
level.
|
|
(b)
|
For
purposes of this Section 11.4, "
Years of
Service
" are as defined in Section 1.32 of the Plan, provided
however, that Years of Service shall
exclude:
|
|
(1)
|
all
Years of Service completed in a Plan Year beginning before January 1,
1984,
|
|
(2)
|
all
Years of Service completed in Plan Years in which this Plan was not
top-heavy,
|
|
(3)
|
Plan
Years during which the Employer did not maintain this Plan or a
predecessor Plan, and
|
|
(4)
|
Years
of Service for Plan Years prior to the attainment of age
18.
|
|
(5)
|
Years
of Service prior to the first day of the Plan Year containing the
Participant’s Entry Date.
|
|
(c)
|
(1)
|
For
purposes of this Section 11.4, "
average
compensation
" shall mean the average of the Compensation received
for the highest five (5) consecutive Years of Service, except that years
for this purpose shall not be taken into account if (i) such year ends in
a Plan Year beginning before January 1, 1984, or (ii) such year begins
after the close of the last Plan Year in which the Plan was
top-heavy.
|
|
(2)
|
In
determining a Participant's "average compensation" for top heavy minimum
benefits, if there shall not be five Years of Service from which to
determine an average, then all Compensation earned by the Participant
during the applicable top heavy years shall be considered in computing his
average compensation, provided that he has completed at least 1,000 Hours
of Service in each such year. The average shall be taken over
the total number of 1,000 hour years actually completed by the Employee
during the period considered.
|
|
(d)
|
If
this Plan is Top-Heavy for any Plan Year, the Accrued Benefit of a Non-Key
Employee who is a Participant during the Plan Year, shall be no less than
the Minimum Accrued Benefit defined
herein.
|
|
(e)
|
Any
benefit calculated pursuant to this Section 11.4 which is or may become
payable to a Participant on Delayed Retirement must be actuarially
increased for late commencement using the assumptions for Actuarial
Equivalence as stated in Section
1.2.
|
11.5
|
Participation In More
Than One Plan
. If a Non-Key Employee participates in a
Top-Heavy Defined Contribution Plan maintained by the Employer, Section
11.4 will not apply to the Non-Key Employee and the Defined Contribution
Plan will provide the "minimum benefit accrual." to the exclusion of any
other Defined Contribution Plan or Defined Benefit Plan of the
Employer.
|
11.6
|
Limitation on
Allocations
. If, during any Limitation Year, beginning
prior to January 1, 2000, the Participant is a Participant in both a
Defined Contribution plan and a Defined Benefit plan maintained by the
Employer, the limitations of Article 4 will apply to such Participant with
the following required changes:
|
|
(a)
|
"1.0%"
must be substituted for "1.25%" each place it appears in the definition of
Defined Benefit Fraction and Defined Contribution Fraction under Article
IV.
|
|
(b)
|
"$41,500"
must be substituted for "$51,875" in the Transition Fraction defined in
Section 4.3(f)(6) herein.
|
|
(i)
|
Section
11.4(a) is applied substituting "3%" for "2%";
or
|
|
(ii)
|
the
Employer contribution under the Employer's Defined Contribution Plan for
each Participant who is not a Key Employee is 4% of such Participant's
total compensation; and
|
|
(iii)
|
the
present value of the cumulative Accrued Benefits under the Plan for
Participants who are Key Employees does not exceed 90% of the present
value of the total Accrued Benefits of all Participants;
and
|
|
(iv)
|
the
sum of (i) the present value of the cumulative Accrued Benefits for Key
Employees under all Defined Benefit plans in the Aggregation Group and
(ii) the aggregate of the accounts of Key Employees under all Defined
Contribution plans in the Aggregation Group does not exceed 90% of such
sum determined for all Employees.
|
11.7
|
Minimum
Vesting
. For any Plan Year in which the Plan is
determined to be a Top-Heavy Plan pursuant to Section 11.3, each
Participant's Accrued Benefit funded by the Employer shall become vested
in accordance with the following
schedule:
|
Years of Vesting Service
|
Vesting Percentage
|
|
Less
than 3 years
|
0%
|
|
3
years or more
|
100%
|
12.1
|
Except
where otherwise specifically indicated, responsibility for administration
of this Plan shall be reposed in a Retirement Committee composed of not
less than three (3) individuals. The members of the Committee
shall be appointed by the Board of Directors of the
Employer. An individual shall not be ineligible to be a member
of the Committee because he is or may be an officer, director or
stockholder of the Employer or a Participant under the
Plan.
|
12.2
|
The
Committee shall hold meetings, upon such notice, at such place or places
and at such time or times as it may from time to time
determine. Notice shall not be required if waived in
writing. A majority of the members of the Committee shall
constitute a quorum for the transaction of business. All
resolutions or other actions taken by the Committee at any meeting shall
be by vote of a majority of those present at any such meeting and entitled
to vote. Resolutions may be adopted or other action taken
without a meeting upon written consent signed by at least two-thirds of
the members of the Committee.
|
12.3
|
For
convenience, the Committee may sign, or any member or members designated
by the Committee may sign, any document as and in the name of the
Committee.
|
12.4
|
The
Committee shall appoint one of its members to act as its Chairman and may
appoint a Secretary who need not be a member of the
Committee.
|
12.5
|
No
member of the Committee shall have any right to vote or decide upon any
matter relating solely to himself or to any of his rights or benefits
under any part of the Plan.
|
12.6
|
The
decision of the Committee in matters within its jurisdiction shall be
final, binding and conclusive upon the Company and upon any other person
affected by such decision, subject to the claims procedure hereinafter set
forth.
|
12.7
|
Any
member of the Committee may resign at any time, and his successor shall be
appointed by the Board.
|
12.8
|
The
Board may remove at any time any member of the Committee appointed by it,
provided, only that at the same time it appoints a successor
member.
|
12.9
|
No
fee or compensation shall be paid to any member of the Committee for his
services as such.
|
12.10
|
Subject
to the Claims Procedure set forth in Article 13 hereof, the Committee
shall have the duty and authority to interpret at its discretion and
construe the provisions of the Plan, to decide any disputes which may
arise regarding the rights of Employees, whether or not they are
Participants, under the terms of the Plan and any Trust Agreement which
determinations
|
12.11
|
The
Committee shall determine the eligibility of Employees to become
Participants in accordance with the provisions of the Plan from the
information furnished to it by the Company in accordance with the request
of the Committee.
|
12.12
|
Any
certification by the Employer of the information required or permitted to
be certified by the Committee pursuant to the provisions of the Plan may
be relied upon by the Committee until later shown to be
incorrect. The Committee may correct errors, and so far as
practicable, may adjust any benefit or payment or credit
accordingly.
|
12.13
|
A
certification in writing by the Committee signed by the Chairman thereof,
to the occurrence or happening of any event contemplated in this Plan, may
be relied upon by the Trustee.
|
12.14
|
The
Committee shall maintain full and complete records of its
deliberations and decisions. Its records shall contain all
relevant data pertaining to individual participating Employees and their
rights under the Plan and in the Trust Fund. It has the duty to
carry into effect all such rights and benefits of each and to answer
questions and assist Employees, whether Participants or other Employees,
to obtain the greatest good from the existence of the Plan and the
Trust.
|
12.15
|
The
Committee must issue a Summary Plan Description to the
Employees describing the Plan. In the event of any
conflict between the terms of the Plan and the Summary Plan Description,
the Plan shall control.
|
12.16
|
Although
it is the present intention of the Employer to pay the reasonable expenses
incident to the operation of the Plan, in the event such expenses are not
paid by the Employer directly and aside from its contribution under the
Plan, such expenses shall be deemed to be a charge upon the Plan
assets. If the Employer shall elect at any time or times, in
any year or years, to pay part or all thereof, either directly or by
reimbursement to the Trust Fund, any such election by the Employer in any
year shall not bind the Employer as to its right to elect in respect to
such expenses or any other expenses at any other time or
times. All requests, directions, requisitions and instructions
of the Committee to the Trustee shall be in writing and signed by the
Committee's Chairman or acting Chairman and by its Secretary or acting
Secretary.
|
12.17
|
The
principal provisions of the Plan shall be communicated to the Employees,
and a copy of the Plan and other documents required by law, shall be
available at the principal office of the Employer for inspection by the
Employees at reasonable times. The Committee shall exercise
such authority and responsibility as it deems appropriate in order to
comply with ERISA and other governmental regulations applying to this
Plan, including maintaining records of Participants' service and benefits,
and making any reports to Participants, the Internal Revenue Service, the
Department of Labor, and other governmental entities not otherwise
required of the Plan Administrator and
Trustee.
|
13.1
|
Filing a Claim for
Benefits
Any claim for a Plan benefit hereunder shall be
filed by a Participant or Beneficiary (claimant) of this Plan
on the form prescribed for such purpose with the Retirement Committee, or
in lieu thereof, by written communication which is made by the claimant or
the claimant's authorized representative which is reasonably calculated to
bring the claim to the attention of the
Committee.
|
13.2
|
Denial of
Claim
|
|
(a)
|
If
a claim for a Plan benefit is wholly or partially denied, notice of the
decision shall be furnished to the claimant by the Committee within a
reasonable period of time after receipt of the claim by the
Committee.
|
|
(b)
|
Any
claimant who is denied a claim for benefit shall be furnished written
notice setting forth:
|
|
(1)
|
The
specific reason or reasons for the
denial;
|
|
(2)
|
Specific
reference to the pertinent Plan provisions upon which the denial is
based;
|
|
(3)
|
A
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary;
|
|
(4)
|
An
explanation of the Plan's claim review
procedure.
|
13.3
|
Claims Review
Procedure
|
|
(a)
|
In
order that a claimant may appeal a denial of a claim, a claimant or his
duly authorized representative:
|
|
(1)
|
May
request a review by written application to the Committee not later than 60
days after receipt by the claimant of written notification of denial of a
claim;
|
|
(2)
|
May
review pertinent documents; and
|
|
(3)
|
May
submit issues and comments in
writing.
|
|
(b)
|
A
decision on review of a denied claim shall be made not later than 60 days
after receipt of a request for review, unless special circumstances
require an extension of time for processing, in which case a decision
shall be rendered within a reasonable period of time, but not later than
120 days after receipt of a request for
review.
|
|
(c)
|
The
decision on review shall be in writing and shall include the specific
reason(s) for the decision and the specific reference(s) to the pertinent
Plan provisions on which the decision is
based.
|
14.1
|
Basis of Contributions
to Pension Plan or Trust
- The Employer agrees to pay to the
Insurer or Trustee for each Plan Year that amount, if any, which is deemed
necessary by actuarial study to fund the Plan, but not less than the
amount required under the Minimum Funding Standards of Section 412 of the
Internal Revenue Code.
|
14.2
|
Return of Employer
Contributions
- Employer contributions to the Plan may not revert
to the Employer. However, any contributions which are made to the Plan
because of a good faith mistake of fact may be returned to the Employer
within one (1) year after the payment of such contributions to the
Plan. In the event that the contribution is conditioned on the
initial qualification of the Plan, a timely determination letter request
has been filed properly and the Plan receives an adverse determination,
then any contributions made to the Plan shall be returned to the
Employer.
|
14.3
|
An
enrolled
actuary
shall be retained by the Plan. Such actuary
shall prepare an actuarial statement on an annual
basis.
|
14.4
|
The
provisions of this Article 14 shall be deemed the procedure for
establishing and carrying out the funding policy and method of this
Plan. Such funding policy and method shall be consistent with
the objectives of this Plan and with the requirements of Title I of the
Employee Retirement Income Security Act of
1974.
|
14.5
|
No Voluntary Employee
Contributions are Allowed
. Voluntary Contributions
by a Participant of this Plan are not permitted.
Employee
Contributions
means contributions to the plan made by a Participant
during the Plan Year.
|
15.1
|
Board of Directors of
Employer
|
|
(a)
|
Terminating
Plan;
|
|
(b)
|
Amending
Plan;
|
|
(c)
|
Appointment
of Retirement Committee.
|
15.2
|
Employer
- The
Employer shall have the following responsibilities and
powers:
|
|
(a)
|
Funding Policy
- The Employer shall, in consultation with an enrolled actuary, determine
the funding policy of the Plan and communicate it to the Trustee so that
the Trustee may coordinate investment policy with the needs of the
Plan. The Employer may delegate such responsibility and
authority to the Plan Administrator, the Trustee or any other
person. The Employer may enter into a Group Annuity Contract
with any Insurer for the purpose of accumulating Plan
assets.
|
|
(b)
|
Appointment of Plan
Administrator
- The Employer is the named Plan
Administrator. The Employer may, however, delegate such
function by appointing any person or any number of persons to administer
the Plan as provided in Article 12. In the event of such
appointment, the person or persons so appointed shall be the successor
Plan Administrator. Any person or persons so appointed may be
removed by the Employer upon thirty (30) days written notice unless a
shorter period is agreed to.
|
|
(c)
|
Appointment of
Investment Manager
- The Employer may, in its discretion, appoint
an Investment Manager to manage the assets of the Plan. In such
event, since the Trustee will not have exclusive discretion to manage and
control the Plan assets, the Trustee will not be liable for any act or
omission of such Investment
Manager. Plan
|
|
assets
can also be invested with any licensed insurance company under a Group
Annuity Contract.
|
|
(d)
|
Review of
Fiduciaries
- The Employer shall periodically review the
performance of any fiduciary or any other person to whom any duties have
been delegated.
|
15.3
|
Plan
Administrator
- The Plan Administrator shall have the following
responsibilities and powers:
|
|
(a)
|
General Powers
- The Plan Administrator shall administer the Plan in accordance with its
terms and shall have all the powers necessary to carry out the provisions
of the Plan. The Administrator shall interpret the Plan and
shall determine all questions, including questions of eligibility under
Article 2, arising in the interpretation, administration and application
of the Plan. Any such determination shall be conclusive and
binding on all persons except as otherwise provided herein or by
law. Any exercise of discretion by the Plan Administrator shall
be exercised in a nondiscriminatory
manner.
|
|
(b)
|
Procedures, Records
and Reports
- The Plan Administrator shall establish operating
procedures and shall keep a record of his actions, as well as all books of
account, records or other data necessary for the administration of the
Plan and/or required by law or regulations issued pursuant to such
law. The Plan Administrator shall prepare and file or publish
with the Secretary of Labor or the Secretary of the Treasury, or to any
other official or agency as may hereafter be required, all reports,
documents or other information as may be required under law to be so filed
or published.
|
|
(c)
|
Directions to
Trustee
- The Plan Administrator shall notify the Trustee or
Insurer in writing of any action the Plan Administrator in its discretion
desires the Trustee or Insurer to take and the Trustee or Insurer shall be
entitled to and obligated to rely on such directions until such time as
the Plan Administrator shall file a written revocation of such direction
with the Trustee or Insurer, or unless the Trustee or Insurer knows that
any such direction constitutes a breach of the Plan Administrator's
fiduciary obligations, in which case the Trustee or Insurer may take
reasonable steps under the circumstances to remedy such
breach.
|
|
(d)
|
Agents and
Counsel
- The Plan Administrator may engage agents to assist him in
his duties, and may consult with counsel, actuaries, accountants,
specialists and other persons as he deems necessary or
desirable. The Plan Administrator shall be indemnified by the
Employer with respect to any action taken or omitted by him in good faith
reliance on the advice of such persons, provided that the Plan
Administrator has acted prudently in selecting or retaining such persons,
to which end he shall periodically review such person's
performance.
|
|
(e)
|
Expenses
- The
Trustee shall be authorized to pay from the Trust all expenses of
administration including, but not limited to, the payment of professional
fees of
|
|
(f)
|
Reports Furnished
Participants
- The Plan Administrator shall furnish to each Plan
Participant, and to each Beneficiary receiving benefits under the Plan,
within the time limits specified in the Code and ERISA, each of the
following:
|
|
(1)
|
A
Summary Plan Description and periodic
revision;
|
|
(2)
|
Notification
of amendments to the Plan; and
|
|
(3)
|
A
Summary Annual Report which summarizes the Annual Report filed with the
Department of Labor.
|
|
(g)
|
Reports Available to
Participants
- The Plan Administrator shall make copies of the
following documents available at the principal office of the Employer for
examination by any Plan Participant or
Beneficiary:
|
|
(1)
|
The
Pension Plan and Trust Agreement;
|
|
(2)
|
The
Summary Plan Description; and
|
|
(3)
|
The
latest annual report.
|
16.1
|
If
Employer contributions under this Plan are used for the benefit of an
Employee who is among the 25 highest paid Employees of the Employer as of
the effective date of this Plan, and whose anticipated annual pension
under this Plan exceeds $1,500, then, upon the occurrence of the
conditions described in Section 16.2, the Employer contributions which are
used for the benefit of any such Employee are restricted in accordance
with Section 16.3.
|
16.2
|
The
restrictions described in Section 16.3 become applicable
if:
|
|
(a)
|
This
Plan is terminated within 10 years after its
establishment.
|
|
(b)
|
The
benefits of an Employee described in Section 16.1 become payable within 10
years after the effective date of this Plan,
or
|
|
(c)
|
The
benefits of an Employee described in Section 16.1 become payable after the
Plan had been in effect for 10 years, and the full current costs of the
Plan for the first 10 years have not been
funded.
|
16.3
|
The
restrictions required under Section 16.1 provide that the Employer
contributions which may be used for the benefit of an Employee described
in such Section 16.1 shall not exceed the greater of $20,000, or 20% of
the first $50,000 of the annual compensation of such Employee multiplied
by the number of years between the effective date of this Plan
and
|
|
(a)
|
The
date of the termination of this
Plan,
|
|
(b)
|
In
the case of an Employee described in Section 16.2(b), the date the benefit
of the Employee becomes payable, if before the date of the termination of
this Plan, or
|
|
(c)
|
In
the case of an Employee described in Section 16.2(c), the date of the
failure to meet the full current costs of this
Plan.
|
16.4
|
For
purposes of this Article, the Employer contributions, which, at a given
time, may be used for the benefits of an Employee, include any unallocated
funds which would be used for his benefits if this Plan were then
terminated or the Employee were then to withdraw from this Plan, as well
as all contributions allocated up to that time exclusively for his
benefits.
|
|
(a)
|
The
term "benefits" includes any periodic income, any withdrawal values
payable to a living Employee, and the cost of any death benefits which may
be payable after retirement on behalf of an Employee, but does not include
the cost of any death benefits with respect to an Employee before
retirement or the amount of any death benefits actually payable after the
death of an Employee, whether such death occurs before or after
retirement.
|
|
(b)
|
The
term "full current costs" means the normal cost, as defined in Code
Section 1.404(a)-6, for all years since the effective date of the Plan,
plus any interest on the unfunded liability during such
period.
|
|
(c)
|
The
term "annual compensation" of an Employee means either such Employee's
average regular annual compensation, or such average compensation over the
last five years, or such Employee's last annual compensation if such
compensation is reasonably similar to his average regular annual
compensation for the five preceding
years.
|
16.5
|
Notwithstanding
anything to the contrary contained in this Article 16, the following
provisions shall apply for Plan Years beginning on or after January 1,
1992. In the event of plan termination, the benefit of any
highly compensated active or former Employee is limited to a benefit that
is nondiscriminatory under Section 401(a)(4) of the
Code.
|
|
(i)
|
was
a 5% owner (as defined under Code Section 416(i)(1)(A)(iii)) during the
determination year or look back year,
or
|
|
(ii)
|
earned
more than $80,000 (as adjusted by a Cost of Living Index under Code
Section 415(d) as approved by the Secretary of the Treasury) during the
preceding Plan Year.
|
|
(iii)
|
The
determination of whether a former Employee is a former Highly Compensated
Employee shall be made in accordance with (i) and (ii)
above.
|
17.1
|
No
Participant under this Plan shall have any legal right, title or interest
in the Plan or Trust. The interest of any Participant,
beneficial or otherwise, shall be limited to that provided in the Plan and
no designated Beneficiary shall have any greater rights than as provided
by this Plan.
|
17.2
|
Except
to the extent permitted by law, the Participant may not anticipate,
encumber, alienate or assign any of his rights, claims, or interests in
this Plan or any part thereof. No payments, benefits, or rights
arising by reason of this Plan shall in any way be subject to the
Participant's debts, contracts, or engagements, or to any judicial
processes to levy upon or attach the same for payment
thereof.
|
17.3
|
Qualified Domestic
Relations Order
– No violation of the non-alienation provisions of
ERISA occurs where a portion of the benefits of a Participant is required
to be paid to the Participant’s Spouse pursuant to a Qualified Domestic
Relations Order. A “Qualified Domestic Relations Order” is a
judgment or decree (including approval of a property settlement agreement)
that relates to the provisions of child support, alimony payments or
marital property, rights to a spouse, former spouse, child or other
dependent of a Participant and is made pursuant to a state domestic
relations law. The Qualified Domestic Relations Order may not
alter the amount or the form of plan benefits. The Qualified
Relations Order shall conform to all the criteria found in Code Section
414(p).
|
17.4
|
Offset of a
Participant's Accrued Benefit
- Pursuant to Code Section
401(a)(13)(C), the offset of a Participant's Accrued Benefit in the Plan
will not violate ERISA's prohibition against assignment or alienation of
benefits if the Participant is ordered or required on or after August 5,
1997 to pay under:
|
|
(a)
|
a
judgment or conviction for a crime involving the
Plan;
|
|
(b)
|
a
civil judgement (including a consent order or decree) entered by a court
in an action brought in connection with a violation (or alleged violation)
of ERISA's fiduciary responsibility provisions;
or
|
|
(c)
|
a
settlement agreement between the Department of Labor or the Pension
Benefit Guaranty Corporation and the Participant in connection with a
violation or alleged violation of ERISA's fiduciary responsibility
provisions by a fiduciary or any other person; provided such judgement,
order, decree or settlement agreement expressly provides for such
offset.
|
18.1
|
Not Party to
Agreement
- No Insurer shall be considered to be a party to this
Plan or to have any responsibility for the validity of this Plan, or for
any action taken by the Employer or Trustee. The Insurer shall
be fully protected in accepting payments from the Employer or Trustee and
in making payments of any amounts to the Trustee, Employer, Plan
Participant, or Beneficiary, in accordance with instructions from the
Trustee or Employer, without liability to see to the application of such
payments.
|
18.2
|
The
Insurer shall be fully protected from any liability in assuming that the
Plan has not been amended or terminated until notice of any amendment or
termination of the Plan has been received by the Insurer at its home
office. No amendment to the Plan shall deprive the Insurer of
any protection except as to policies issued by it after receipt at its
home office of notice of the terms of such
amendment.
|
18.3
|
The
Insurer shall be fully protected in dealing with the Trustee or Employer
according to the latest notification received by the Insurer at its home
office. For purposes of this Article, Trustee shall mean any
one or more of the Trustees under this Plan, whether individual or
corporate, or any officer of the
Employer.
|
19.1
|
Application for
Determination Letter
- The Employer shall timely submit this Plan
and all necessary supporting documents to the Internal Revenue Service
with the request for a Determination Letter that the Plan as embodied in
this Agreement meets the qualification requirements of the
Code.
|
19.2
|
Amendment
-
This Plan, and each of its provisions, may be amended at any time and from
time to time, as follows:
|
|
(a)
|
All
proposed amendments shall be set forth in a written instrument, detailing
any and all changes to the Plan.
|
|
(b)
|
All
proposed amendments shall be presented to the Board of Directors for its
consideration and shall be enacted by a vote of the Board of
Directors.
|
|
(c)
|
All
actions taken by the Board of Directors shall be set forth in enabling
documentation (e.g., minutes of meetings setting forth appropriate
resolutions adopted therein or appropriate certification of actions taken
by the Board of Directors in lieu of a formal
meeting).
|
|
(d)
|
The
Board of Directors shall authorize, in the documentation referred to under
(c), above, an officer or officers of the Employer to execute said
amendment or amendments on behalf of the Employer and to certify as to the
date on which the steps set forth under (a), (b) and (c) took place (e.g.,
a Certificate of Resolution).
|
|
(e)
|
If
an amendment provides for a significant reduction in the rate of future
benefit accruals, the Plan Administrator shall provide a written notice,
not less than 15 days prior to the effective date of the amendment,
setting forth the Plan amendment and its effective date,
to:
|
|
(1)
|
each
participant in the Plan,
|
|
(2)
|
each
beneficiary who is an alternate payee (within the meaning of ERISA Section
206(d)(3)(K)) under an applicable qualified domestic relations order
(within the meaning of ERISA Section 206(d)(3)(B)(i)0,
and
|
|
(3)
|
each
employee organization representing Participants in the
Plan.
|
|
(f)
|
Any
amendment:
|
|
(1)
|
shall
not reduce the vested benefit of a Participant determined as of the later
of the date such amendment is adopted, or the date such amendment becomes
effective;
|
|
(2)
|
shall
not revise the vesting schedule under the Plan unless each Participant
having three (3) or more Years of Vesting Service is permitted to elect
within a reasonable period after the adoption of such amendment to have
his vested benefit computed under the Plan without regard to such
amendment; a reasonable period for purposes of this Section shall be a
period which begins no later than the date the Plan amendment is adopted
and ends no later than the last to occur of the
following:
|
|
(i)
|
sixty
(60) days after the date the Plan amendment is
adopted.
|
|
(ii)
|
sixty
(60) days after the day on which the Plan amendment becomes
effective.
|
|
(iii)
|
sixty
(60) days after a Participant is issued written notice of the Plan
amendment.
|
|
(3)
|
shall
not allow for the use of funds or assets held under this Plan other than
for the benefit of Participants or their Beneficiaries, nor shall any
amendment provide that any funds or assets of this Plan shall ever revert
to or be used or enjoyed by the
Employer;
|
|
(4)
|
shall
not deprive an Insurer of any of its exemptions and immunities with
respect to policies issued by it prior to receipt by an Insurer of notice
of such amendment;
|
|
(5)
|
shall
not amend the Plan if such amendment would violate the provisions of any
applicable law, or any regulations.
|
|
(6)
|
shall
not become effective prior to approval by the Secretary of Labor, if such
approval is required under applicable law or
regulation.
|
19.3
|
Termination
-
While it is the intention of the Employer to continue this Plan and
contributions hereunder indefinitely, the Employer reserves the right to
terminate this Plan at any time, as
follows:
|
|
(a)
|
A
proposal to terminate the Plan shall be set forth in a written instrument,
detailing said action to the Board of
Directors.
|
|
(b)
|
A
proposal to terminate the Plan shall be presented to the Board of
Directors for its consideration and shall be enacted by a vote of the
Board of Directors.
|
|
(c)
|
All
actions taken by the Board of Directors to terminate the Plan shall be set
forth in enabling documentation (e.g., minutes of meetings setting forth
appropriate resolutions adopted therein or appropriate certification of
actions taken by the Board of Directors in lieu of a formal
meeting).
|
|
(d)
|
The
Board of Directors shall authorize, in the documentation referred to under
(c), above, an officer or officers of the Employer to execute such
instruments and take such actions as are necessary to effectuate the
termination of the Plan on behalf of the Employer and to certify as to the
date on which the steps set forth under (a), (b) and (c) took place (e.g.,
a Certificate of Resolution).
|
|
(e)
|
Subsequent
to the actions set forth under (a), (b), (c) and (d), above, the Plan
Administrator shall provide all affected parties a written notice of
intent to terminate, not less than 60 days prior to the proposed
termination date, stating that such termination is intended and the
proposed termination date.
|
|
(f)
|
If
the termination is a Standard Termination, as set forth under ERISA
Section 4041, the Plan Administrator shall follow the procedures set forth
under ERISA Section 4041(b) and the regulations thereunder, as they be
amended from time to time.
|
|
(g)
|
If
the termination is a Distress Termination, as set forth under ERISA
Section 4041, the Plan Administrator shall follow the procedures set forth
under ERISA Section 4041(c) and the regulations thereunder, as they be
amended from time to time.
|
19.4
|
Vesting Upon Complete
or Partial Termination
- Upon complete termination of this Plan, or
upon partial termination of the Plan, the Accrued Benefit of each affected
Participant as of the date of termination shall be
nonforfeitable.
|
19.5
|
Procedure for
Termination
- Prior to any termination of this Plan by the
Employer, all required notices shall be filed with the Pension Benefit
Guaranty Corporation as such corporation is established under ERISA
Section 4001 and no amounts under the termination procedure shall be paid
until the time period expires for the Pension Benefit Guaranty Corporation
to issue a notice of noncompliance nullifying a proposed
termination.
|
19.6
|
Allocation of
Assets
If this Plan is terminated and is subject to the
rules governing Plan terminations as promulgated by the Pension Benefit
Guaranty Corporation, then the following method shall be used for the
allocation of assets:
|
|
(a)
|
After
Notice by the Plan Administrator to the Pension Benefit Guaranty
Corporation that the Plan is to be terminated and upon expiration of the
time period for the Pension Benefit Guaranty Corporation to issue a notice
of noncompliance nullifying a proposed termination, the Plan Administrator
shall allocate the assets of the Plan in accordance with ERISA Section
4044, in the order set forth below, to the extent the assets are available
to provide benefits to Plan Participants and Beneficiaries. The
Administrator or Trustee shall make the allocation as
follows:
|
|
(1)
|
In
the case of the benefit of a Participant or Beneficiary, which was in pay
status as of the beginning of the three (3) year period ending on the
termination date of the Plan, to each such benefit, based on the
provisions of the Plan (as in effect during the five (5) year period
ending on such date) under which such benefit would be the
least.
|
|
(2)
|
In
the case of a Participant's or Beneficiary's benefit (other than a benefit
described in (1) above) which would have been in pay status as of the
beginning of such three (3) year period if the Participant had retired
prior to the beginning of the three (3) year period and if his benefits
had commenced (in the normal form of annuity under the Plan) as of the
beginning of such period, to each such benefit based on the provisions of
the Plan (as in effect during the five (5) year period ending on such
date) under which such benefit would be the
least.
|
|
(b)
|
If
the assets available for allocation under any priority category (other
than the fifth and sixth priority categories) are insufficient to satisfy
in full the benefits of all individuals, the assets shall be allocated pro
rata among such individuals on the basis of the present value (as of the
termination date) of their respective
benefits.
|
|
(c)
|
If
any assets of the Plan attributable to Employee contributions remain after
all liability of the Plan to Participants and their Beneficiaries has been
satisfied, such assets shall be equitably distributed to the Employees who
made such contributions (or their Beneficiaries) in accordance with their
rate of contributions.
|
19.7
|
Amounts
allocated to any person shall be paid in cash, through the purchase of
immediate or deferred annuities or by periodic payments, as the Committee
may determine. Any assets remaining, after providing in full
for the amounts required by this Article 19 shall revert to the
Employer.
|
19.8
|
If
at any time the Plan is terminated with respect to any group of
Participants of the Employer under such circumstances as constitute a
partial termination of the Plan within the meaning of Code Section
411(d)(3), as amended, the amounts held under any of the Trust Agreements
that are allocable to the Participants as to whom such termination
occurred shall be determined by the Committee and such amount shall be
segregated by the Trustee or Trustees as assets held under a separate
Plan. The funds thus allocated to such separate Plan shall be
applied for the benefit of such Participants in the manner described
above.
|
19.9
|
Non-Liability of
Employer
- The Employer shall have no liability to the Participant
for the payment of any benefits provided for by the Plan, nor shall the
Employer have any liability for the administration of the assets of the
Trust, and each Participant shall look solely to the assets of the Plan
for any payment of Retirement Benefits provided for by the
Plan.
|
20.1
|
This
Plan is created for the exclusive benefit of the Employees of the Employer
and their Beneficiaries and shall be interpreted in a manner consistent
with its existence as an Employees' Plan and Trust qualified under the
Internal Revenue Code of 1986 and subject to the provisions of the
Employee Retirement Income Security Act of 1974, or any other legislation
of similar import. This Section cannot be altered or
amended.
|
20.2
|
Exclusive Benefit of
Participant
- It shall be impossible, at any time prior to the
satisfaction of all liabilities with respect to Employees and their
Beneficiaries under this Plan, for any part of the corpus or income to be
(within the taxable year or thereafter) used for, or diverted to, purposes
other than for the exclusive benefit of the Employer's Employees or their
Beneficiaries; and the Employer shall not be entitled to receive back any
part of its contributions to this Trust, except as set forth under Section
14.2, Article 19 and this Article
20.
|
20.3
|
Neither
the Employer nor the Trustee shall be responsible for the validity of any
interest of policies, or for the failure on the part of any Insurer to
make any payments or provide any benefits under any contract or policy, or
for the action of any person or persons which may render any policy
invalid or unenforceable. Neither the Employer nor the Trustee
shall be responsible for any inability to perform or delay in performing
any act occasioned by any restriction or provisions of any policy, or
imposed by any Insurer, or by any other person. In case it
becomes impossible for the Employer or the Trustee to perform any act
under this Plan, that act shall be performed which, in the judgment of the
Plan Administrator, will most nearly carry out the intent and purpose of
this Plan. All parties of this Plan who are in any way
interested herein shall be bound by any acts performed under such
conditions.
|
20.4
|
Headings
- The
headings of the Plan have been inserted for convenience of reference only
and are to be ignored in any construction of the provisions
hereof.
|
20.5
|
Plan not Contract of
Employment
- This Plan shall not be construed as creating or
changing any contract of employment between the Employer and its
Employees, whether Participants hereunder or not; and the Employer retains
the right to deal with its Employees, whether Participants hereunder or
not, and to terminate their respective employment at any time, to the same
extent as though this Plan had not been
created.
|
20.6
|
Invalidity of Certain
Provisions
- If any provisions of this Plan shall be held invalid
or unenforceable, such invalidity or unenforceability shall not affect any
other provisions and this Plan shall be construed and enforced as if such
provisions had not been included.
|
20.7
|
Law Governing
-
This Plan shall be construed and enforced according to the laws of the
State of North Carolina, other than its laws respecting choice of law, to
the extent not
|
20.8
|
General
Undertaking
- All parties to this Plan and all persons claiming any
interest whatsoever hereunder agree to perform any and all acts and
execute any and all documents and papers which may be necessary or
desirable for the carrying out of this Plan or any of its
provisions.
|
20.9
|
Agreement to Bind
Heirs, Etc
. - This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns, as such terms shall apply, of any
and all parties hereto, present and
future.
|
20.10
|
Action by
Employer
- Whenever under the terms of the Plan the Employer is
permitted or required to take some action, such action may be taken by any
officer of the Employer who has been duly authorized by the Board of
Directors of the Employer.
|
20.11
|
Rule Against
Perpetuities
- If the indefinite continuance of this Plan would be
in violation of the law, then this Plan shall continue for the maximum
period permitted by law and shall then terminate, whereupon distribution
of its assets shall be made as provided for in Article 19.6 of this
Plan.
|
20.12
|
Effect of Merger,
Consolidation or Transfer of Assets
- Before this Plan can be
merged or consolidated with any other Plan, or its assets or liabilities
transferred to any other Plan, the Plan Administrator must secure (and
file with the Secretary of Treasury at least thirty (30) days beforehand)
a certification from an Enrolled Actuary, and if the Plan is terminated
after the merger, each Participant must be assured that he will be
entitled to a benefit after the merger, consolidation or transfer which is
equal to or greater than the benefit he would have been entitled to
receive immediately before such transaction (if the plan had then been
terminated).
|
21.1
|
This
Article applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this Article, a
distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
|
21.2
|
Definitions
:
|
|
(a)
|
Eligible rollover
distribution
: An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
|
|
(b)
|
Eligible retirement
plan
: An eligible retirement plan is an individual
retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified trust described in Code
Section 401(a), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
|
|
(c)
|
Distributee
: A
distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), are distributees with regard to the interest of the
spouse or former spouse.
|
|
(d)
|
Direct
rollover
: A direct rollover is a payment by the plan to
the eligible retirement plan specified by the
distributee.
|
FIRST
BANCORP
|
||
By:
/s/ James H. Garner
|
||
James
H. Garner- President
|
Year
of
|
Covered
|
Year
of
|
Covered
|
|||
Birth
|
Compensation
|
Birth
|
Compensation
|
|||
1933
|
31,128
|
1951
|
66,960
|
|||
1934
|
33,060
|
1952
|
68,232
|
|||
1935
|
35,100
|
1953
|
69,444
|
|||
1936
|
37,212
|
1954
|
70,620
|
|||
1937
|
39,312
|
1955
|
72,756
|
|||
1938
|
43,464
|
1956
|
73,764
|
|||
1939
|
45,540
|
1957
|
74,700
|
|||
1940
|
47,616
|
1958
|
75,528
|
|||
1941
|
49,656
|
1959
|
76,296
|
|||
1942
|
51,648
|
1960
|
77,004
|
|||
1943
|
53,568
|
1961
|
77,664
|
|||
1944
|
55,452
|
1962
|
78,228
|
|||
1945
|
57,312
|
1963
|
78,780
|
|||
1946
|
59,148
|
1964
|
79,284
|
|||
1947
|
60,936
|
1965
|
79,704
|
|||
1948
|
62,580
|
1966
|
80,052
|
|||
1949
|
64,140
|
1967
|
80,280
|
|||
1950
|
65,580
|
1968 or later
|
80,400
|
Age
at which
benefits
commence
|
Maximum
Excess Percent
|
|||
70
|
1.048%
|
|||
69
|
0.950%
|
|||
68
|
0.863%
|
|||
67
|
0.784%
|
|||
66
|
0.714%
|
|||
65
|
0.650%
|
|||
64
|
0.607%
|
|||
63
|
0.563%
|
|||
62
|
0.520%
|
|||
61
|
0.477%
|
|||
60
|
0.433%
|
|||
59
|
0.412%
|
|||
58
|
0.390%
|
|||
57
|
0.368%
|
|||
56
|
0.347%
|
|||
55
|
0.325%
|
1.
|
Effective date.
This
section shall be effective for Limitation Years ending after December 31,
2001.
|
2.
|
Effect on Participants.
Benefit increases resulting from the increase in the limitations of
section 415(b) of the Code will be provided to all Employees participating
in the Plan who have one Hour of Service on or after the first day of the
first Limitation Year ending after December 31,
2001.
|
3.
|
Definitions.
|
|
3.1
|
Defined Benefit Dollar
Limitation.
The “Defined Benefit Dollar Limitation” is $160,000, as
adjusted, effective January 1 of each calendar year, under section 415(d)
of the Code in such manner as the Secretary shall prescribe, and payable
in the form of a straight life annuity. A limitation as adjusted under
section 415(d) will apply to Limitation Years ending with or within the
calendar year for which the adjustment
applies.
|
|
3.2
|
Maximum permissible
benefit:
The “maximum permissible benefit” is the lesser of the (i)
Defined Benefit Dollar Limitation or (ii) the Defined Benefit Compensation
Limitation (both adjusted where required, as provided in (a) and, if
applicable, in (b) or (c) below).
|
|
(a)
|
If
the Participant has fewer than 10 Years of Participation in the Plan, the
Defined Benefit Dollar Limitation shall be multiplied by a fraction, (i)
the numerator of which is the number of Years (or part thereof) of
Participation in the Plan and (ii) the denominator of which is 10. In
the
|
|
(b)
|
If
the benefit of a Participant begins prior to age 62, the Defined Benefit
Dollar Limitation applicable to the Participant at such earlier age is an
annual benefit payable in the form of a straight life annuity beginning at
the earlier age that is the Actuarial Equivalent of the Defined Benefit
Dollar Limitation applicable to the Participant at age 62 (adjusted under
(a) above, if required). The Defined Benefit Dollar Limitation applicable
at an age prior to age 62 is determined as the lesser of (i) the Actuarial
Equivalent (at such age) of the Defined Benefit Dollar Limitation computed
using the interest rate and mortality table (or other tabular factor)
specified in Section 4.3(b) of the Plan and (ii) the Actuarial Equivalent
(at such age) of the Defined Benefit Dollar Limitation computed using a 5%
interest rate and the applicable mortality table as defined in Section
4.3(b) of the Plan. Any decrease in the Defined Benefit Dollar Limitation
determined in accordance with this paragraph (b) shall not reflect a
mortality decrement if benefits are not forfeited upon the death of the
Participant. If any benefits are forfeited upon death, the full mortality
decrement is taken into account.
|
|
(c)
|
If
the benefit of a Participant begins after the Participant attains age 65,
the Defined Benefit Dollar Limitation applicable to the Participant at the
later age is the annual benefit payable in the form of a straight life
annuity beginning at the later age that is actuarially equivalent to the
Defined Benefit Dollar Limitation applicable to the Participant at age 65
(adjusted under (a) above, if required). The Actuarial Equivalent of the
Defined Benefit Dollar Limitation applicable at an age after age 65 is
determined as the lesser of (i) the Actuarial Equivalent (at such age) of
the Defined Benefit Dollar Limitation computed using the interest rate and
mortality table (or other tabular factor) specified in Section 4.3(b) of
the Plan or (ii) the Actuarial Equivalent (at such age) of the Defined
Benefit Dollar Limitation computed using a 5% interest rate assumption and
the applicable mortality table as defined in Section 4.3(b) of the Plan.
For these purposes, mortality between age 65 and the age at which benefits
commence shall be ignored.
|
1.
|
Increase in limit.
The
annual Compensation of each Participant taken into account in determining
benefit accruals in any Plan Year beginning after December 31, 2001, shall
not exceed $200,000. Annual Compensation means Compensation during the
Plan Year or such other consecutive 12-month period over which
Compensation is otherwise determined under the Plan (the determination
period). For purposes of determining benefit accruals in a Plan Year
beginning after December 31, 2001, Compensation for any prior
determination period shall be limited as provided by the employer in the
Plan.
|
2.
|
Cost-of-living
adjustment.
The $200,000 limit on annual Compensation in paragraph
1 shall be adjusted for cost-of-living increases in accordance with
section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect
for a calendar year applies to annual Compensation for the determination
period that begins with or within such calendar
year.
|
3.
|
Compensation Limit for Prior
Determination Periods.
In determining benefit accruals in Plan
Years beginning after December 31, 2001, the annual Compensation limit in
paragraph 1 of Section II (Increase in Compensation Limit), for
determination periods beginning before January 1, 2002, shall be $150,000
for any determination period beginning in 1996 or earlier; $160,000 for
any determination period beginning in 1997, 1998, or 1999; and $170,000
for any determination period beginning in 2000 or
2001.
|
1.
|
Effective date.
This
section shall apply for purposes of determining whether the Plan is a
top-heavy Plan under section 416(g) of the Code for Plan Years beginning
after December 31, 2001, and whether the Plan satisfies the minimum
benefits requirements of section 416(c) of the Code for such years. This
section amends Article 11 of the
Plan.
|
2.
|
Determination
of top-heavy status.
|
|
2.1
|
Key employee.
Key
Employee means any Employee or former Employee (including any deceased
Employee) who at any time during the Plan Year that includes the
determination date was an officer of the Employer having annual
Compensation greater than $130,000 (as adjusted under section 416(i)(1) of
the Code for Plan Years beginning after December 31, 2002), a 5-percent
owner of the Employer, or a 1- percent owner of the Employer having annual
Compensation of more than $150,000. For this purpose, annual Compensation
means Compensation within the meaning of section 415(c)(3) of the Code.
The determination of who is a Key Employee will be made in accordance with
section 416(i)(1) of the Code and the applicable regulations and other
guidance of general applicability issued
thereunder.
|
|
2.2
|
Determination of present values
and amounts.
This section 2.2 shall apply for purposes of
determining the present values of Accrued Benefits and the amounts of
account balances of Employees as of the determination
date.
|
|
2.2.1
|
Distributions during year
ending on the determination date.
The present values of Accrued
Benefits and the amounts of account balances of an Employee as of the
determination date shall be increased by the distributions made with
respect to the Employee under the Plan and any Plan aggregated with the
Plan under section 416(g)(2) of the Code during the 1-year period ending
on the determination date. The preceding sentence shall also apply to
distributions under a terminated Plan which, had it not been terminated,
would have been aggregated with the Plan under section 416(g)(2)(A)(i) of
the Code. In the case of a distribution made for a reason other than
separation from service, death, or disability, this provision shall be
applied by substituting “5-year period” for “1-year
period.”
|
|
2.2.2
|
Employees not performing
services during year ending on the determination date.
The Accrued
Benefits and accounts of any individual
who
|
3.
|
Minimum benefits.
For
purposes of satisfying the minimum benefit requirements of section
416(c)(1) of the Code and the Plan, in determining Years of Service with
the Employer, any service with the Employer shall be disregarded to the
extent that such service occurs during a Plan Year when the Plan benefits
(within the meaning of section 410(b) of the Code) no Key Employee or
former Key Employee.
|
1.
|
Effective date.
This
section shall apply to distributions made after December 31,
2001.
|
2.
|
Modification of definition of
eligible retirement Plan.
For purposes of the direct rollover
provisions in section 21.2 of the Plan, an eligible retirement Plan shall
also mean an annuity contract described in section 403(b) of the Code and
an eligible Plan under section 457(b) of the Code which is maintained by a
state, political subdivision of a state, or any agency or instrumentality
of a state or political subdivision of a state and which agrees to
separately account for amounts transferred into such Plan from this Plan.
The definition of eligible retirement Plan shall also apply in the case of
a distribution to a surviving spouse, or to a spouse or former spouse who
is the alternate payee under a qualified domestic relation order, as
defined in section 414(p) of the
Code.
|
1.
|
Effective Date
. This
Section shall apply to distributions with annuity starting dates on or
after December 31, 2002.
|
2.
|
Mortality
Table
. Notwithstanding any other plan provisions to the
contrary, the applicable mortality table used for purposes of adjusting
any benefit or limitation under Code Section 415(b)(2)(B), (C), or (D) as
set forth in Section 4.3 of the Plan and the applicable mortality table
used for purposes of satisfying the requirements of Code Section 417(e) as
set forth in Section 1.2(b)(2) of the Plan is the table prescribed in
Rev.Rul. 2001-62.
|
|
“(b)
|
For
a Participant who meets the requirements of Section 7.1(c) above, unless
an optional form of benefit is selected within the Election Period
pursuant to a Qualified Election, the Participant's surviving Eligible
Spouse (if any) will receive the same benefit that would be payable if the
Participant had retired with an immediate Qualified Joint and 100%
Survivor Annuity on the day prior to his
death.”
|
FIRST
BANCORP
|
||||
By: /s/ James H. Garner | ||||
Its: President & CEO | ||||
ATTEST:
|
||||
By: /s/ Anna G. Hollers | ||||
Its: Secretary |
|
“(a)
|
A
Participant who is not yet eligible for Early Retirement under Article 3,
or Normal Retirement under Article 4, and who ceases to be an Employee due
to disability shall be eligible to receive a Disability Retirement Benefit
if:
|
|
(1)
|
a
Participant qualifies for any disability benefits sponsored by the
Employer under any existing Insured Disability Income Plan, or if no such
benefits are provided, then
|
|
(2)
|
a
Participant becomes unable to engage in his regular occupation by reason
of any physical or mental impairment as determined by a licensed physician
chosen by the Participant and/or the disability insurance carrier, meeting
the following requirements:
|
|
(A)
|
The
Participant has become totally disabled by bodily injury, disease or
mental disorder and is unable to perform the material and substantial
duties of his regular occupation for which he is reasonably fitted by
training, education, or experience,
and
|
|
(B)
|
The
licensed physician expects said bodily injury, disease or mental disorder
to result in the death of the Participant or last for a continuous period
of not less than twelve months and;
|
|
(C)
|
Such
disability has continued for a period of ninety (90) days and will be
permanent and continuous for the remainder of the Participant's
lifetime.
|
|
(3)
|
For
purposes of this Plan, however, no Participant shall be deemed totally and
permanently disabled if his disability results from active participation
in a riot, due to a pre-existing condition, any injury incurred while
engaging in any illegal or felonious enterprise, intentionally
self-inflicted injury, or injury incurred while serving in the armed
forces of any country.
|
|
(4)
|
The
Employer may require proof of continued disability from time to time, but
not more frequently than once in any six (6) month
period.
|
|
(5)
|
If
the Participant’s condition constitutes total disability under the federal
Social Security Acts, the Retirement Committee may rely upon such
determination that the Participant is disabled for purposes of the
Plan.
|
|
(6)
|
The
determination of disability shall be applied uniformly to all
Participants.”
|
|
“13.2
|
Claims
Procedure
.
|
FIRST
BANCORP
|
||
By:
/s/ Anna G. Hollers
|
||
Title:
EVP &
Secretary
|
||
ATTEST:
|
||
By:
/s/ Delores George
|
||
Title:
Asst.
Secretary
|
1.1
|
Effective
Date
. The provisions of this Amendment will apply with
respect to distributions made on or after March 28,
2005.
|
|
1.2
|
Precedence
. This
Amendment supersedes any inconsistent provision of the
Plan.
|
1.1
|
Adoption and effective date of
Amendment
. The Employer adopts this Amendment to the Plan to
reflect recent law changes. This Amendment is effective as indicated below
for the respective provisions.
|
1.2
|
Superseding of inconsistent
provisions
. This Amendment supersedes the provisions of the Plan to
the extent those provisions are inconsistent with the provisions of this
Amendment.
|
1.3
|
Employer’s election.
The
Employer adopts the default provisions of this Amendment except as
otherwise elected in Article II.
|
1.4
|
Construction.
Except as
otherwise provided in this Amendment, any reference to “Section” in this
Amendment refers only to sections within this Amendment, and is not a
reference to the Plan. The Article and Section numbering in this Amendment
is solely for purposes of this Amendment, and does not relate to any Plan
article, section or other numbering
designations.
|
1.5
|
Effect of restatement of
Plan
. If the Employer restates the Plan, then this Amendment shall
remain in effect after such restatement unless the provisions in this
Amendment are restated or otherwise become obsolete (
e.g.
, if the Plan is
restated onto a plan document which incorporates PPA
provisions).
|
2.1
|
Default Provisions
.
Unless the Employer elects otherwise in this Article, the following
defaults will apply:
|
|
a.
|
The
applicable mortality table described in Amendment Section 3.3.3(c) is
effective for years beginning after December 31,
2008.
|
|
b.
|
Nonspousal
beneficiary rollovers are permitted effective for distributions made after
December 31, 2006.
|
|
c.
|
In-Service
distributions prior to Normal Retirement Age are not
permitted.
|
|
d.
|
The
Code Section 436 benefit restriction provisions provide for the resumption
of benefits when the restrictions no longer
apply.
|
|
e.
|
Continued
benefit accruals pursuant to the Heroes Earnings Assistance and Relief Tax
Act of 2008 (HEART Act) are not
provided.
|
|
f.
|
The
applicable interest rate shall be based on the first month (lookback
month) prior to the Plan Year (stability period) during which a
distribution is made.
|
|
g.
|
If
the cash balance provisions are elected at Amendment Section 2.8, then the
vesting schedule will be a 3-year cliff schedule and the interest credit
provided in the Plan is not
modified.
|
2.2
|
Effective date of applicable
mortality table set forth in Amendment Section 3.3.3(c)
. The
applicable mortality table described in Amendment Section 3.3.3(c) is
effective for years beginning after December 31, 2008, unless an earlier
date is specified:
|
|
o
|
_________________
(may be a year beginning after December 31, 2007 and before January 1,
2009, or to any portion of such
year).
|
2.3
|
Non-spousal rollovers
(Article IV). Non-spousal rollovers are permitted after December 31, 2006
unless elected below (Article IV provides that such distributions are
always permitted after December 31,
2009):
|
|
o
|
Use
the following instead of the default (select
one):
|
|
1.
o
|
Not
permitted.
|
|
2.
o
|
Permitted
effective____________ (not earlier than January 1, 2007 and not later than
January 1, 2010).
|
2.4
|
In-service distributions
(Article VIII)
.
In-Service Distributions prior to Normal Retirement Age are not
permitted unless elected below:
|
|
o
|
In-service
distributions will be allowed for Participants at age 62 effective as of
the first day of the 2007 Plan Year unless another age and/or date is
elected below:
|
|
1.
o
|
age
___ (may not be earlier than 62)
|
|
2.
o
|
effective
as of ______________ (may not be earlier than the first day of the 2007
Plan Year).
|
2.5
|
Treatment of Plan as of Close
of Prohibited or Cessation Period (Section 12.8).
Unless otherwise
elected below, payments and accruals will resume effective as of the day
following the close of the period for which any limitation of payment or
accrual of benefits under Amendment Sections 12.4 or 12.5
applies.
|
|
¨
|
Accruals
will cease after the close of the period for which any limitation of
payment or accrual of benefits under Amendment Sections 12.4 or 12.5
applies.
|
|
o
|
The
provisions of Amendment Section 13.2
apply.
|
2.7
|
Applicable interest
rate.
For purposes of Amendment Section 14.2, unless otherwise
elected below, the stability period is the Plan Year during which a
distribution is made and the lookback month is the first calendar month
preceding the first day of the stability period. (If an alternative
election is being made, then a selection at both a. and b. must be
made.)
|
|
a.
|
The
stability period for purposes of determining the Applicable Interest Rate
is:
|
|
1.
o
|
One
calendar month
|
2.
o
|
One
Plan Year quarter
|
3.
o
|
One
calendar year quarter
|
4.
o
|
One
Plan Year
|
|
5.
o
|
One
calendar year
|
|
b.
|
The
lookback month relating to the Stability Period is
the:
|
|
1.
o
|
first
calendar month preceding the first day of the Stability
Period
|
|
2.
o
|
second
calendar month preceding the first day of the Stability
Period
|
|
3.
o
|
third
calendar month preceding the first day of the Stability
Period
|
|
4.
o
|
fourth
calendar month preceding the first day of the Stability
Period
|
|
5.
o
|
fifth
calendar month preceding the first day of the Stability
Period
|
|
6.
o
|
average
rate for two or more calendar months preceding the first day of the
Stability Period (specify which of the first through fifth months are
averaged) _____________________
|
2.8
|
Cash balance plans.
The
provisions of Article XV (Cash Balance provisions) only apply if elected
below:
|
|
o
|
The
provisions of Article XV apply (may only be selected if the Plan already
includes cash balance provisions).
|
|
a.
o
|
Vesting.
In lieu of the
default 3-year cliff vesting schedule (a Participant’s Accrued Benefit is
nonforfeitable upon the Participant’s completion of three years of vesting
service), the following schedule applies (must be at least as liberal as
3-year cliff vesting at each point in
time):
|
Years
of vesting service
|
Nonforfeitable
percentage
|
________
|
_________%
|
________
|
_________%
|
________
|
_________%
|
|
b.
o
|
Market Rate of Interest
.
The interest credit rate set forth in the Plan shall be changed to ______
(only select this option b. if a change is being made to the interest rate
credit).
|
3.1
|
General
Rule
|
3.1.1
|
Effective date.
The
Employer adopts this Article III to reflect certain provisions of the
Pension Funding Equity Act of 2004 (PFEA), as modified by the Pension
Protection Act of 2006 and the Worker, Retiree and Employer Recovery Act
of 2008. Except as otherwise provided herein, effective for
distributions in Plan Years beginning after December 31, 2003, the
required determination of actuarial equivalence of forms of benefit other
than a straight life annuity shall be made in accordance with this
Amendment. However, this Amendment does not supersede any prior election
to apply the transition rule of section 101(d)(3) of PFEA as described in
Notice 2004-78.
|
3.2.2
|
Limitation Years beginning
before July 1, 2007
. For Limitation Years beginning before July 1,
2007, the actuarially equivalent straight life annuity is equal to the
annual amount of the straight life annuity commencing at the same annuity
starting date that has the same actuarial present value as the
Participant’s form of benefit computed using whichever of the following
produces the greater annual amount:
|
|
(a)
|
the
interest rate and the mortality table (or other tabular factor) specified
in the Plan for adjusting benefits in the same form;
and
|
|
(b)
|
a 5
percent interest rate assumption and the “applicable mortality table”
defined in the Plan for that annuity starting
date.
|
3.2.3
|
Limitation Years beginning on
or after July 1, 2007
. For Limitation Years beginning on or after
July 1, 2007, the actuarially equivalent straight life annuity is equal to
the greater of:
|
|
(a)
|
The
annual amount of the straight life annuity (if any) payable to the
Participant under the Plan commencing at the same annuity starting date as
the Participant’s form of benefit;
and
|
|
(b)
|
The
annual amount of the straight life annuity commencing at the same annuity
starting date that has the same actuarial present value as the
Participant’s form of benefit, computed using a 5 percent interest rate
assumption and the applicable mortality table defined in the Plan for that
annuity starting date.
|
3.3
|
Benefit Forms Subject
to the Present Value Rules of Code Section
417(e)(3).
|
3.3.1
|
Form of benefit.
The
straight life annuity that is actuarially equivalent to the Participant’s
form of benefit shall be determined as indicated under this Section 3.3 if
the form of the Participant’s benefit is other than a benefit form
described in Section 3.2.1.
|
3.3.2
|
Annuity Starting Date in small
plans for Plan Years Beginning in 2009 and later.
Notwithstanding
anything in this Amendment to the contrary, if the annuity starting date
of the Participant’s form of benefit is in a Plan Year beginning in or
after 2009, and if the Plan is maintained by an eligible employer as
defined Code Section 408(p)(2)(C)(i), the actuarially equivalent straight
life annuity is equal to the annual amount of the straight life annuity
commencing at the same annuity starting date that has the same actuarial
present value as the Participant’s form of benefit, computed using
whichever of the following produces the greater annual
amount:
|
|
(a)
|
The
interest rate and the mortality table (or other tabular factor) specified
in the Plan for adjusting benefits in the same form;
and
|
|
(b)
|
A
5.5 percent interest rate assumption and the applicable mortality table
described in Article XIV.
|
3.3.3
|
Annuity Starting Date in Plan
Years Beginning After 2005
. Except as provided in Section 3.3.2, if
the annuity starting date of the Participant’s form of benefit is in a
Plan Year beginning after December 31, 2005, the actuarially equivalent
straight life annuity is equal to the greatest
of:
|
|
(a)
|
The
annual amount of the straight life annuity commencing at the same annuity
starting date that has the same actuarial present value as the
Participant’s form of benefit, computed using the interest rate and the
mortality table (or other tabular factor) specified in the Plan for
adjusting benefits in the same
form;
|
|
(b)
|
The
annual amount of the straight life annuity commencing at the same annuity
starting date that has the same actuarial present value as the
Participant’s form of benefit, computed using a 5.5 percent interest rate
assumption and the applicable mortality table for the distribution under
Treasury Regulations Section 1.417(e)-1(d)(2) (determined in accordance
with Article XIV for Plan Years after the effective date of that Article);
and
|
|
(c)
|
The
annual amount of the straight life annuity commencing at the same annuity
starting date that has the same actuarial present value as the
Participant’s form of benefit, computed for the distribution under
Treasury Regulations Section 1.417(e)-1(d)(3) (determined in accordance
with Article XIV for Plan Years after the effective date of that Article)
and the applicable mortality table for the distribution under Treasury
Regulations Section 1.417(e)-1(d)(2) (determined in accordance with
Article XIV for Plan Years after the effective date specified below),
divided by 1.05.
|
3.3.4
|
Annuity Starting Date in Plan
Years Beginning in 2004 or 2005.
If the annuity starting date of
the Participant’s form of benefit is in a Plan Year beginning in 2004 or
2005, the actuarially equivalent straight life annuity is equal to the
annual amount of the straight life annuity commencing at the same annuity
starting date that has the same actuarial present value as the
Participant’s form of benefit, computed using whichever of the following
produces the greater annual amount:
|
|
(a)
|
The
interest rate and the mortality table (or other tabular factor) specified
in the Plan for adjusting benefits in the same form;
and
|
|
(b)
|
A
5.5 percent interest rate assumption and the applicable mortality table
for the distribution under Treasury Regulations Section
1.417(e)-1(d)(2).
|
4.1
|
Non-spouse beneficiary rollover
right
. For distributions after December 31, 2009, and unless
otherwise elected in Amendment Section 2.3, for distributions after
December 31, 2006, a non-spouse beneficiary who is a “designated
beneficiary” under Code Section 401(a)(9)(E) and the Regulations
thereunder, by a direct trustee-to-trustee transfer (“direct rollover”),
may roll over all or any portion of his or her distribution to an
Individual Retirement Account (IRA) the beneficiary establishes for
purposes of receiving the distribution. In order to be able to roll over
the distribution, the distribution otherwise must satisfy the definition
of an “eligible rollover distribution” under Code Section
401(a)(31).
|
4.2
|
Certain requirements not
applicable
. Although a non-spouse beneficiary may roll over
directly a distribution as provided in Section 4.1 of this Amendment, the
distribution, if made prior to January 1, 2010, is not subject to the
direct rollover requirements of Code Section 401(a)(31) (including Code
Section 401(a)(31)(B)), the notice requirements of Code Section 402(f) or
the mandatory withholding requirements of Code Section 3405(c). If a
non-spouse beneficiary receives a distribution from the Plan, the
distribution is not eligible for a 60-day (non-direct)
rollover.
|
4.3
|
Trust beneficiary
. If
the Participant’s named beneficiary is a trust, the Plan may make a direct
rollover to an IRA on behalf of the trust, provided the trust satisfies
the requirements to be a designated beneficiary within the meaning of Code
Section 401(a)(9)(E).
|
4.4
|
Required minimum distributions
not eligible for rollover.
A non-spouse beneficiary may not roll
over an amount that is a required minimum distribution, as determined
under applicable Treasury Regulations and other Internal Revenue Service
guidance. If the Participant dies before his or her required beginning
date and the non-spouse beneficiary rolls over to an IRA the maximum
amount eligible for rollover, the beneficiary may elect to use either the
5-year rule or the life expectancy rule, pursuant to Treasury Regulations
Section 1.401(a)(9)-3, A-4(c), in determining the required minimum
distributions from the IRA that receives the non-spouse beneficiary’s
distribution.
|
5.1
|
Direct rollover to qualified
plan/403(b) plan
. For taxable years beginning after December 31,
2006, a Participant may elect to transfer employee after-tax contributions
by means of a direct rollover to a qualified plan or to a 403(b) plan that
agrees to account separately for amounts so transferred (including
interest thereon), including accounting separately for the portion of such
distribution which is includible in gross income and the portion of such
distribution which is not includible in gross
income.
|
6.1
|
180-day notification
period
. For any distribution notice issued in Plan Years beginning
after December 31, 2006, any reference to the 90-day maximum notice period
requirements of Code Sections 402(f) (the rollover notice), 411(a)(11)
(Participant’s consent to distribution), and 417 (notice regarding the
joint and survivor annuity rules) is changed to 180
days.
|
6.2
|
Effect of delay of
distribution
. Notices given to Participants pursuant to Code
Section 411(a)(11) in Plan Years beginning after December 31, 2006 shall
include a description of how much larger benefits will be if the
commencement of distributions is
deferred.
|
6.3
|
Explanation of relative
value
. Notices to Participants shall include the relative values of
the various optional forms of benefit, if any, under the Plan as provided
in Treasury Regulations Section 1.417(a)-3. This provision is effective as
of the applicable effective date set forth in Treasury Regulations (
i.e.
, to qualified
pre-retirement survivor annuity explanations provided on or after July 1,
2004; to qualified joint and survivor annuity explanations with respect to
any distribution with an annuity starting date that is on or after
February 1, 2006, or on or after October 2, 2004 with respect to any
optional form of benefit that is subject to the requirements of Code
Section 417(e)(3) if the actuarial present value of that optional form is
less than the actuarial present value as determined under Code Section
417(e)(3)).
|
7.1
|
Permissible QDROs
.
Effective on or after April 6, 2007, a domestic relations order that
otherwise satisfies the requirements for a qualified domestic relations
order (QDRO) will not fail to be a QDRO: (i) solely because the order is
issued after, or revises, another domestic relations order or QDRO; or
(ii) solely because of the time at which the order is issued, including
issuance after the annuity starting date or after the Participant’s
death.
|
7.2
|
Other QDRO requirements
apply
. A domestic relations order described in Section 7.1 is
subject to the same requirements and protections that apply to
QDROs.
|
8.1
|
Age 62 distributions
. If
elected in Amendment Section 2.4, then effective as of the date specified
therein, a Participant who has attained the specified age and who is not
separated from employment may elect to receive a distribution of his or
her vested Accrued Benefit.
|
9.1
|
Right to Elect Qualified
Optional Survivor Annuity.
Effective with respect to Plan Years
beginning after December 31, 2007, a Participant who elects to waive the
qualified joint and survivor annuity form of benefit under the Plan shall
be entitled to elect the “qualified optional survivor annuity” at any time
during the applicable election period. Furthermore, the written
explanation of the joint and survivor annuity shall explain the terms and
conditions of the “qualified optional survivor
annuity.”
|
9.2
|
Definition of Qualified
Optional Survivor Annuity.
|
|
(a)
|
For
purposes of this Article, the term “qualified optional survivor annuity”
means an annuity:
|
|
(1)
|
For
the life of the Participant with a survivor annuity for the life of the
Participant’s spouse which is equal to the “applicable percentage” of the
amount of the annuity which is payable during the joint lives of the
Participant and the Participant’s spouse,
and
|
|
(2)
|
Which
is the actuarial equivalent of a single annuity for the life of the
Participant.
|
|
(b)
|
For
purposes of this Section, the “applicable percentage” is based on the
survivor annuity percentage (
i.e.
, the percentage
which the survivor annuity under the Plan’s qualified joint and survivor
annuity bears to the annuity payable during the joint lives of the
Participant and the spouse). If the survivor annuity percentage is less
than seventy-five percent (75%), then the “applicable percentage” is
seventy-five percent (75%); otherwise the “applicable percentage” is fifty
percent (50%).
|
10.1
|
Roth IRA rollover.
For
distributions made after December 31, 2007, a Participant or beneficiary
may elect to roll over directly an “eligible rollover distribution” to a
Roth IRA described in Code Section 408A(b). For this purpose, the term
“eligible rollover distribution” includes a rollover distribution
described in Article V, if
applicable.
|
11.1
|
Severance from employment.
Effective for any Plan Year beginning after December 31, 2001, the
provisions of the Plan setting forth the top-heavy provisions of Code
Section 416 are modified by substituting the term “separation from
service” with “severance from
employment.”
|
12.1
|
Effective Date and Application
of Section
.
|
|
(a)
|
Effective
Date. The provisions of this Section apply to Plan Years beginning after
December 31, 2007.
|
|
(b)
|
This
Section only applies to single employer plans (a plan that is not a
multiemployer plan within the meaning of Code Section 414(f)) and does not
apply to a plan maintained pursuant to one or more collective bargaining
agreements between employee representatives and one or more employers.
Furthermore, this Section shall not apply to for the first five (5) Plan
Years of the Plan. For purposes of this subsection, the term Plan shall
include any predecessor plan.
|
|
(c)
|
Notwithstanding
anything in this Section to the contrary, the provision of Code Section
436 and the Regulations thereunder are incorporated herein by
reference.
|
|
(d)
|
For
Plans that have a valuation date other than the first day of the Plan
Year, the provisions of Code Section 436 and this Article will applied in
accordance with Regulations.
|
12.2
|
Funding-Based Limitation on
Shutdown Benefits and Other Unpredictable Contingent Event
Benefits
|
|
(a)
|
In
general. If a Participant is entitled to an “unpredictable contingent
event benefit” payable with respect to any event occurring during any Plan
Year, then such benefit may not be provided if the “adjusted funding
target attainment percentage” for such Plan Year (1) is less than sixty
percent (60%) or, (2) would be less than sixty percent (60%) percent
taking into account such
occurrence.
|
|
(b)
|
Exemption.
Subsection (a) shall cease to apply with respect to any Plan Year,
effective as of the first day of the Plan Year, upon payment by the
Employer of a contribution (in addition to any minimum required
contribution under Code Section 430) equal
to:
|
|
(1)
|
in
the case of Section 12.2(a)(1) above, the amount of the increase in the
funding target of the Plan (under Code Section 430) for the Plan Year
attributable to the occurrence referred to in Subsection (a),
and
|
|
(2)
|
in
the case of 12.2(a)(2) above, the amount sufficient to result in an
“adjusted funding target attainment percentage” of sixty percent
(60%).
|
|
(c)
|
Unpredictable
contingent event benefit. For purposes of this subsection, the term
“unpredictable contingent event benefit” means any benefit payable solely
by reason of:
|
|
(1)
|
a
plant shutdown (or similar event, as determined by the Secretary of the
Treasury), or
|
|
(2)
|
an
event other than the attainment of any age, performance of any service,
receipt or derivation of any compensation, or occurrence of death or
disability.
|
12.3
|
Limitations on Plan Amendments
Increasing Liability for
Benefits
|
|
(a)
|
In
general. No amendment which has the effect of increasing liabilities of
the Plan by reason of increases in benefits, establishment of new
benefits, changing the rate of benefit accrual, or changing the rate at
which benefits become nonforfeitable may take effect during any Plan Year
if the “adjusted funding target attainment percentage” for such Plan Year
is:
|
|
(1)
|
less
than eighty percent (80%), or
|
|
(2)
|
would
be less than eighty percent (80%) taking into account such
amendment.
|
|
(b)
|
Exemption.
Section 12.3(a) above shall cease to apply with respect to any Plan Year,
effective as of the first day of the Plan Year (or if later, the effective
date of the amendment), upon payment by the Employer of a contribution (in
addition to any minimum required contribution under Code Section 430)
equal to--
|
|
(A)
|
in
the case of paragraph Section 12.3(a)(1) above, the amount of the increase
in the funding target of the Plan (under Code Section 430) for the Plan
Year attributable to the amendment,
and
|
|
(B)
|
in
the case of paragraph Section 12.3(a)(2) above, the amount sufficient to
result in an “adjusted funding target attainment percentage” of eighty
percent (80%).
|
|
(c)
|
Exception
for certain benefit increases. Subsection (a) shall not apply to any
amendment which provides for an increase in benefits under a formula which
is
|
12.4
|
Limitations on Accelerated
Benefit Distributions
|
|
(a)
|
Funding
percentage less than sixty percent (60%). If the Plan’s “adjusted funding
target attainment percentage” for a Plan Year is less than sixty percent
(60%), then the Plan may not pay any “prohibited payment” after the
valuation date for the Plan Year.
|
|
(b)
|
Bankruptcy.
During any period in which the Employer is a debtor in a case under Title
11, United States Code, or similar Federal or State law, the Plan may not
pay any “prohibited payment.” The preceding sentence shall not apply on or
after the date on which the enrolled actuary of the Plan certifies that
the “adjusted funding target attainment percentage” of the Plan is not
less than one hundred percent
(100%).
|
|
(c)
|
Limited
payment if percentage at least sixty percent (60%) but less than eighty
percent (80%) percent.
|
|
(1)
|
In
general. If the Plan’s “adjusted funding target attainment percentage” for
a Plan Year is sixty percent (60%) or greater but less than eighty percent
(80%), then the Plan may not pay any “prohibited payment” after the
valuation date for the Plan Year to the extent the amount of the payment
exceeds the lesser of:
|
|
(A)
|
fifty
percent (50%) of the amount of the payment which could be made without
regard to this subsection, or
|
|
(B)
|
the
present value (determined under guidance prescribed by the Pension Benefit
Guaranty Corporation, using the interest and mortality assumptions under
Code Section 417(e)) of the maximum guarantee with respect to the
participant under ERISA Section
4022.
|
|
(2)
|
One-time
application.
|
|
(A)
|
In
general. Only one “prohibited payment” meeting the requirements of
subsection (1) may be made with respect to any Participant during any
period of consecutive Plan Years to which the limitations under either
Section 12.4(a) or Section 12.4(b) or this paragraph
applies.
|
|
(B)
|
Treatment
of beneficiaries. For purposes of this subparagraph, a Participant and any
Beneficiary (including an alternate payee, as defined in Code Section
414(p)(8)) shall be treated as one Participant. If the Accrued
Benefit of a Participant is allocated to such an alternate payee and one
or more other persons, the amount under Section 12.4(c)(1) shall be
allocated among such persons in the same manner as the Accrued Benefit is
allocated
|
|
(d)
|
Exception.
This subsection shall not apply for any Plan Year if the terms of the Plan
(as in effect for the period beginning on September 1, 2005, and ending
with such Plan Year) provide for no benefit accruals with respect to any
Participant during such period.
|
|
(e)
|
“Prohibited
payment.” For purposes of this subsection, the term “prohibited payment”
means:
|
|
(1)
|
any
payment, in excess of the monthly amount paid under a single life annuity
(plus any Social Security supplements described in the last sentence of
Code Section 411(a)(9)), to a Participant or Beneficiary whose Annuity
Starting Date occurs during any period a limitation under Section 12.4(a)
or Section 12.4(b) is in effect,
|
|
(2)
|
any
payment for the purchase of an irrevocable commitment from an insurer to
pay benefits, and
|
|
(3)
|
any
other payment specified by the Secretary by
Regulations.
|
12.5
|
Limitation on Benefit Accruals
for Plans with Severe Funding
Shortfalls
|
|
(a)
|
In
general. If the Plan’s “adjusted funding target attainment percentage” for
a Plan Year is less than sixty percent (60%), benefit accruals under the
Plan shall cease as of the valuation date for the Plan
Year.
|
|
(b)
|
Exemption.
Section 12.5(a) shall cease to apply with respect to any Plan Year,
effective as of the first day of the Plan Year, upon payment by the
Employer of a contribution (in addition to any minimum required
contribution under Code Section 430) equal to the amount sufficient to
result in an “adjusted funding target attainment percentage” of sixty
percent (60%).
|
|
(c)
|
Temporary
modification of limitation. In the case of the first Plan Year beginning
during the period beginning on October 1, 2008, and ending on September
30, 2009, the provisions of Section 12.5(a) above shall be applied by
substituting the Plan’s “adjusted funding target attainment percentage”
for the preceding Plan Year for such percentage for such Plan Year, but
only if the “adjusted funding target attainment percentage” for the
preceding year is greater.
|
12.6
|
Rules Relating to Contributions
Required to Avoid Benefit
Limitations
|
(a)
|
Security
may be provided.
|
|
(1)
|
In
general. For purposes of this section, the “adjusted funding target
attainment percentage” shall be determined by treating as an asset of the
Plan any security provided by the Employer in a form meeting the
requirements of Section 12.6(a)(2)
below.
|
|
(2)
|
Form
of security. The security required under Section 12.6(a)(1) shall consist
of:
|
|
(A)
|
a
bond issued by a corporate surety company that is an acceptable surety for
purposes of ERISA Section 412,
|
|
(B)
|
cash,
or United States obligations which mature in three (3) years or less, held
in escrow by a bank or similar financial institution,
or
|
|
(C)
|
such
other form of security as is satisfactory to the Secretary and the parties
involved.
|
|
(3)
|
Enforcement.
Any security provided under Section 12.6(a)(1) may be perfected and
enforced at any time after the earlier
of:
|
|
(A)
|
the
date on which the Plan terminates,
|
|
(B)
|
if
there is a failure to make a payment of the minimum required contribution
for any Plan Year beginning after the security is provided, the due date
for the payment under Code Section 430(j),
or
|
|
(C)
|
if
the “adjusted funding target attainment percentage” is less than sixty
percent (60%) for a consecutive period of 7 years, the valuation date for
the last year in the period.
|
|
(4)
|
Release
of security. The security shall be released (and any amounts thereunder
shall be refunded together with any interest accrued thereon) at such time
as the Secretary may prescribe in Regulations, including Regulations for
partial releases of the security by reason of increases in the “adjusted
funding target attainment
percentage.”
|
|
(b)
|
Prefunding
balance or funding standard carryover balance may not be used. No
prefunding balance or funding standard carryover balance under Code
Section 430(f) may be used under Section 12.2, 12.3, or 12.5 to satisfy
any payment an Employer may make under any such subsection to avoid or
terminate the application of any limitation under such
subsection.
|
|
(c)
|
Deemed
reduction of funding balances:
|
|
(1)
|
In
general. Subject to Section 12.6(a)(3) above, in any case in which a
benefit limitation under 12.2, 12.3, 12.4 or 12.5 would (but
for this subparagraph and determined without regard to Section 12.2(b),
12.3(b), or 12.5(b)) apply to such Plan for the Plan Year, the Employer
shall be treated for purposes of this title as having made an election
under Code Section 430(f) to reduce the prefunding balance or funding
standard carryover balance by such amount as is necessary for such benefit
limitation to not apply to the Plan for such Plan
Year.
|
|
(2)
|
Exception
for insufficient funding balances. Section 12.6(c)(1) shall not apply with
respect to a benefit limitation for any Plan Year if
the
|
|
application
of Section 12.6(c)(1) would not result in the benefit limitation not
applying for such Plan Year.
|
12.7
|
Presumed Underfunding for
Purposes of Benefit
Limitations
|
|
(a)
|
Presumption
of continued underfunding. In any case in which a benefit limitation under
Section 12.2, 12.3, 12.4 or 12.5 has been applied to a Plan with respect
to the Plan Year preceding the current Plan Year, the “adjusted funding
target attainment percentage” of the Plan for the current Plan Year shall
be presumed to be equal to the “adjusted funding target attainment
percentage” of the Plan for the preceding Plan Year until the enrolled
actuary of the Plan certifies the actual “adjusted funding target
attainment percentage” of the Plan for the current Plan
Year.
|
|
(b)
|
Presumption
of underfunding after 10th month. In any case in which no certification of
the “adjusted funding target attainment percentage” for the current Plan
Year is made with respect to the Plan before the first day of the 10th
month of such year, for purposes of Section 12.2, 12.3, 12.4 or 12.5, such
first day shall be deemed, for purposes of such subsection, to be the
valuation date of the Plan for the current Plan Year and the Plan’s
“adjusted funding target attainment percentage” shall be conclusively
presumed to be less than sixty percent (60%) as of such first
day.
|
|
(c)
|
Presumption
of underfunding after 4th month for nearly underfunded plans. In any case
in which:
|
|
(1)
|
a
benefit limitation under subsection Section 12.2, 12.3, 12.4 or 12.5 did
not apply to a Plan with respect to the Plan Year preceding the current
Plan Year, but the “adjusted funding target attainment percentage” of the
Plan for such preceding Plan Year was not more than ten (10) percentage
points greater than the percentage which would have caused such subsection
to apply to the Plan with respect to such preceding Plan Year,
and
|
|
(2)
|
as
of the first day of the 4th month of the current Plan Year, the enrolled
actuary of the Plan has not certified the actual “adjusted funding target
attainment percentage” of the Plan for the current Plan Year, until the
enrolled actuary so certifies, such first day shall be deemed, for
purposes of such subsection, to be the valuation date of the Plan for the
current Plan Year and the “adjusted funding target attainment percentage”
of the Plan as of such first day shall, for purposes of such subsection,
be presumed to be equal to ten (10) percentage points less than the
“adjusted funding target attainment percentage” of the Plan for such
preceding Plan Year.
|
12.8
|
Treatment of Plan as of Close
of Prohibited or Cessation Period.
The following provisions apply
for purposes of applying this
Section.
|
|
(a)
|
Operation
of Plan after period. Unless otherwise elected in this Amendment Section
2.5, payments and accruals will resume effective as of the day following
the close of the period for which any limitation of payment or accrual of
benefits under Section 12.4 or 12.5
applies.
|
|
(b)
|
Treatment
of affected benefits. Nothing in this Section 12.8 shall be construed as
affecting the Plan’s treatment of benefits which would have been paid or
accrued but for this Section.
|
12.9
|
Definitions.
|
|
(a)
|
The
term “funding target attainment percentage” has the same meaning given
such term by Code Section 430(d)(2), except as otherwise provided herein.
However, in the case of Plan Years beginning in 2008, the “funding target
attainment percentage” for the preceding Plan Year may be determined using
such methods of estimation as the Secretary may
provide.
|
|
(b)
|
The
term “adjusted funding target attainment percentage” means the “funding
target attainment percentage” which is determined under Section 12.9(a) by
increasing each of the amounts under subparagraphs (A) and (B) of Code
Section 430(d)(2) by the aggregate amount of purchases of annuities for
employees other than highly compensated employees (as defined in Code
Section 414(q)) which were made by the Plan during the preceding two (2)
Plan Years.
|
|
(c)
|
Application
to plans which are fully funded without regard to reductions for funding
balances.
|
|
(1)
|
In
general. In the case of a Plan for any Plan Year, if the “funding target
attainment percentage” is one hundred percent (100%) or more (determined
and without regard to the reduction in the value of assets under Code
Section 430(f)(4)), the “funding target attainment percentage” for
purposes of Sections 12.9(a) and (b) shall be determined without regard to
such reduction.
|
|
(2)
|
Transition
rule. Section 12.9(c)(1) shall be applied to Plan Years beginning after
2007 and before 2011 by substituting for “one hundred percent (100%)” the
applicable percentage determined in accordance with the following
table:
|
In
the case of a Plan Year
|
The
applicable percentage is:
|
|
beginning
in calendar year:
|
||
2008
|
92%
|
|
2009
|
94%
|
|
2010
|
96%
|
|
(3)
|
Section
12.9(c)(2) shall not apply with respect to any Plan Year beginning after
2008 unless the “funding target attainment percentage” (determined without
regard to the reduction in the value of assets under Code Section
430(f)(4)) of the Plan for each preceding Plan Year beginning after 2007
was not less than the applicable percentage with respect to such preceding
Plan Year determined under Section
12.9(c)(2).
|
13.1
|
Death benefits.
In the
case of a death or disability occurring on or after January 1, 2007, if a
participant dies while performing qualified military service (as defined
in Code Section 414(u)), the survivors of the Participant are entitled to
any additional benefits (other than benefit accruals relating to the
period of qualified military service) provided under the Plan as if the
participant had resumed and then terminated employment on account of
death.
|
13.2
|
Benefit accrual.
If,
pursuant to Amendment Section 2.6, the Employer elects to apply this
Section 13.2, then for benefit accrual purposes, the Plan treats an
individual who, on or after January 12, 2007, dies or becomes disabled (as
defined under the terms of the plan) while performing qualified military
service with respect to the Employer as if the individual had resumed
employment in accordance with the individual’s reemployment rights under
USERRA, on the day preceding death or disability (as the case may be) and
terminated employment on the actual date of death or
disability.
|
|
(a)
|
Determination of
benefits
. The Plan will determine the amount of Employee
contributions of an individual treated as reemployed under this Section
13.2 for purposes of applying Code Section 414(u)(8)(C) on the basis of
the individual’s average actual employee contributions for the lesser of:
(i) the 12-month period of service with the Employer immediately prior to
qualified military service; or (ii) if service with the Employer is less
than such 12-month period, the actual length of continuous service with
the Employer.
|
13.3
|
Differential wage
payments.
For years beginning after December 31, 2008, (i) an
individual receiving a differential wage payment, as defined by Code
Section 3401(h)(2), shall be treated as an Employee of the Employer making
the payment, (ii) the differential wage payment shall be treated as
compensation, and (iii) the Plan shall not be treated as failing to meet
the requirements of any provision described in Code Section 414(u)(1)(C)
by reason of any contribution or benefit which is based on the
differential wage payment.
|
14.1
|
Effective date.
Except
as provided by the Pension Benefit Guaranty Corporation (PBGC) and IRS,
the limitations of this Article shall first apply in determining the
amount payable to a Participant having an annuity starting date in a Plan
Year beginning on or after January 1,
2008.
|
14.2
|
Applicable interest
rate
. For purposes of the Plan’s provisions relating to the
calculation of the present value of a benefit payment that is subject to
Code Section 417(e), any provision prescribing the use of the annual rate
of interest on 30-year U.S. Treasury securities shall be implemented by
instead using the rate of interest determined by applicable interest rate
described by Code Section 417(e) after its amendment by PPA. Specifically,
the applicable interest rate shall be the adjusted first, second, and
third segment rates applied under the rules similar to the rules of Code
Section 430(h)(2)(C) for the calendar month (lookback month) before the
first day of
|
|
(a)
|
Code
Section 430(h)(2)(D) were applied by substituting the average yields for
the month described in the preceding paragraph for the average yields for
the 24-month period described in such section,
and
|
|
(b)
|
Code
Section 430(h)(2)(G)(i)(II) were applied by substituting “Section
417(e)(3)(A)(ii)(II)” for “Section 412(b)(5)(B)(ii)(II),”
and
|
|
(c)
|
The
applicable percentage under Code Section 430(h)(2)(G) is treated as being
20% in 2008, 40% in 2009, 60% in 2010, and 80% in
2011.
|
14.3
|
Applicable mortality
assumption
. For purposes of the Plan’s provisions relating to the
calculation of the present value of a benefit payment that is subject to
Code Section 417(e), any provision directly or indirectly prescribing the
use of the mortality table described in Revenue Ruling 2001-62 shall be
amended to prescribe the use of the applicable annual mortality table
within the meaning of Code Section 417(e)(3)(B), as initially described in
Revenue Ruling 2007-67.
|
15.1
|
Effective date.
If
elected in Amendment Section 2.8, the provisions of this Article shall be
effective with respect to distributions made after August 17, 2006, except
as otherwise specified in this
Article.
|
15.2
|
Determination of present value
of accrued benefit
. Notwithstanding any provision of the Plan to
the contrary (including the Plan provisions relating to Code Section
417(e)), effective with respect to distributions made after August 17,
2006, the present value of a participant’s accrued benefit for purposes of
making a distribution of a Participant’s entire vested accrued benefit
(including for purposes of complying with the requirements of Code Section
417(e)), shall be equal to the Participant’s hypothetical account
balance.
|
15.3
|
Vesting.
Except as
otherwise elected in Amendment Section 2.8, the Plan’s vesting schedule is
modified to the extent necessary to provide that all Participants who have
an Hour of Service after the effective date of this subsection and who are
credited with at least three (3) years of service for vesting purposes
shall be one hundred percent (100%) vested in their accrued benefits
derived from Employer contributions. The provisions of this subsection are
generally effective for Plan Years ending after June 29, 2005. However,
for plans in existence on June 29, 2005, this subsection shall only be
effective with respect to Plan Years, and Participants who have an Hour of
Service, after December 31, 2007.
|
15.4
|
Market Rate of Interest
.
The interest rate used for accumulating Participants’ hypothetical account
balances shall not exceed a market rate of return, and regardless of the
rate specified in the Plan or in Amendment Section 2.8, an interest credit
(or equivalent amount) of less than zero shall in no event result in the
account balance or similar amount being less than the aggregate amount of
contributions credited to the hypothetical account. Notwithstanding the
foregoing, upon termination of the
Plan:
|
|
(a)
|
If
the interest credit rate (or an equivalent amount) under the Plan is a
variable rate, then the rate of interest used to determine accrued
benefits under the Plan shall be equal to the average of the rates of
interest used under the Plan during the 5-year period ending on the
termination date; and
|
|
(b)
|
The
interest rate and mortality table used to determine the amount of any
benefit under the Plan payable in the form of an annuity payable at normal
retirement age shall be the rate and table specified under the Plan for
such
|
FIRST
BANCORP
|
|
By:
/s/ Timothy S. Maples
|
|
Authorized
Representative of Employer
|
1.1
|
Effective date of
Amendment
. This Amendment is effective as indicated herein for the
respective provisions.
|
1.2
|
Superseding of inconsistent
provisions
. This Amendment supersedes the provisions of the Plan to
the extent those provisions are inconsistent with the provisions of this
Amendment.
|
1.3
|
Construction.
Except as
otherwise provided in this Amendment, any reference to "Section" in this
Amendment refers only to sections within this Amendment, and is not a
reference to the Plan. The Article and Section numbering in this Amendment
is solely for purposes of this Amendment, and does not relate to any Plan
article, section or other numbering
designations.
|
1.4
|
Effect of restatement of Plan.
If the Employer restates the Plan, then this Amendment shall remain
in effect after such restatement unless the provisions in this Amendment
are restated or otherwise become obsolete (e.g., if the Plan is restated
onto a plan document which incorporates the final Code Section 415
Regulations provisions).
|
|
a.
|
The
transition rule of Section 101(d)(3) of the Pension Funding Equity Act
(PFEA), as described in IRS Notice 2004-78), will not be
used.
|
|
b.
|
The
"Defined Benefit Compensation Limitation" is adjusted after a Participant
has a "Severance from Employment." The "Defined Benefit Dollar Limitation"
is not adjusted after a Participant has a "Severance from
Employment."
|
|
c.
|
The
provisions of the Plan setting forth the definition of compensation for
purposes of Code Section 415 (hereinafter referred to as "415
Compensation"),
|
|
d.
|
The
"first few weeks rule" does not apply for purposes of 415 Compensation
(Amendment Section 3.3).
|
|
e.
|
The
provision of the Plan setting forth the definition of compensation for
benefit purposes (hereinafter referred to as "Plan Compensation") is
modified to provide for the same adjustments to Plan Compensation that are
made to 415 Compensation pursuant to this
Amendment.
|
2.1
|
415 Compensation and Plan
Compensation.
In lieu of the default provisions above, the
following apply: (select all that apply; if no selections are made, then
the defaults apply)
|
a.
o
|
Exclude
leave cashouts (Section 3.2(b))
|
b.
o
|
Exclude
deferred compensation (Section
3.2(c))
|
c.
o
|
Include
military continuation payments (Section
3.2(d))
|
d.
o
|
Include
disability continuation payments (Section
3.2(e)):
|
1.
o
|
For
Nonhighly Compensated Employees
only
|
2.
o
|
For
all participants and the salary continuation will continue for the
following fixed or determinable period:
________________________________
|
e.
o
|
Apply
the administrative delay ("first few weeks") rule (Section
3.3)
|
f.
o
|
No
change from existing Plan
provisions
|
g.
o
|
Exclude
all post-severance compensation
|
h.
o
|
Exclude
post-severance regular pay
|
i.
o
|
Exclude
leave cashouts
|
j.
o
|
Exclude
deferred compensation
|
k.
o
|
Include
military continuation payments
|
l.
o
|
Include
disability continuation payments:
|
1.
o
|
For
Nonhighly Compensated Employees
only
|
2.
|
o
For all participants
and the salary continuation will continue for the following fixed or
determinable period:
________________________________
|
m.
o
|
Other
_________________________
(describe)
|
2.2
|
PFEA Transition rule.
The transition rule of Section 101(d)(3) of the Pension Funding Equity Act
(PFEA), as described in IRS Notice 2004-78, sets out a transition period
during which a plan is permitted to pay a benefit subject to Code Section
417(e)(3) in an amount that would be higher than what is otherwise
permitted under Code Section 415. This higher amount is the lesser of the
transition amount as calculated and the benefit calculated under the terms
of the plan reflecting the limitations of Code Section 415 disregarding
the enactment of PFEA. The transition rule will not apply unless selected
below.
|
|
o
|
The
transition rule applies, which sets the 2003 Code Section 415 limit
calculation as a minimum Code Section 415 limit applicable to the 2004
Plan Year.
|
2.3
|
Adjustment to compensation
limitation after date of severance
. In the case of a Participant
who has had a "Severance from Employment" with the Employer, the "Defined
Benefit Compensation Limitation" applicable to the Participant in any
"Limitation Year" beginning after the date of severance
shall
be automatically
adjusted under Code Section 415(d) unless otherwise elected
below.
|
|
o
|
The
"Defined Benefit Compensation Limitation" shall not be automatically
adjusted.
|
2.4
|
Adjustment to dollar limit
after date of severance
. In the case of a Participant who has had a
"Severance from Employment" with the Employer, the "Defined Benefit Dollar
Limitation" applicable to the Participant in any "Limitation Year"
beginning after the date of severance
shall not
be
automatically adjusted under Code Section 415(d) unless otherwise elected
below.
|
|
o
|
The
"Defined Benefit Dollar Limitation" shall be automatically
adjusted.
|
3.1
|
Effective date.
The
provisions of this Article III shall apply to "Limitation Years" beginning
on and after July 1, 2007.
|
3.2
|
415 Compensation paid after
"Severance from Employment."
415 Compensation shall be adjusted, as
set forth herein and as otherwise elected in Article II, for the following
types of compensation paid after a Participant's "Severance from
Employment" with the Employer maintaining the Plan (or any other entity
that is treated as the Employer pursuant to Code Section 414(b),
(c),
|
|
(a)
|
Regular pay.
415
Compensation shall include regular pay after "Severance from Employment"
if:
|
|
(1)
|
The
payment is regular compensation for services during the Participant's
regular working hours, or compensation for services outside the
Participant's regular working hours (such as overtime or shift
differential), commissions, bonuses, or other similar payments;
and
|
|
(2)
|
The
payment would have been paid to the Participant prior to a "Severance from
Employment" if the Participant had continued in employment with the
Employer.
|
|
(b)
|
Leave cashouts.
Leave
cashouts shall be included in 415 Compensation, unless otherwise elected
in Section 2.1 of this Amendment, if those amounts would have been
included in the definition of 415 Compensation if they were paid prior to
the Participant's "Severance from Employment," and the amounts are payment
for unused accrued bona fide sick, vacation, or other leave, but only if
the Participant would have been able to use the leave if employment had
continued.
|
|
(c)
|
Deferred Compensation
.
Unless otherwise elected in Section 2.1 of this Amendment, 415
Compensation will include deferred compensation if the compensation would
have been included in the definition of 415 Compensation if it had been
paid prior to the Participant's "Severance from Employment," and the
compensation is received pursuant to a nonqualified unfunded deferred
compensation plan, but only if the payment would have been paid at the
same time if the Participant had continued in employment with the Employer
and only to the extent that the payment is includible in the Participant's
gross income.
|
|
(d)
|
Salary continuation payments
for military service Participants.
415 Compensation does not
include, unless otherwise elected in Section 2.1 of this Amendment,
payments to an individual who does not currently perform services for the
Employer by reason of qualified military service (as that term is used in
Code Section 414(u)(1)) to the extent those payments do not exceed the
amounts the individual would have received if the individual had continued
to perform services for the Employer rather than entering qualified
military service.
|
|
(e)
|
Salary continuation payments
for disabled Participants.
Unless
|
|
otherwise
elected in Section 2.1 of this Amendment, 415 Compensation does not
include compensation paid to a Participant who is permanently and totally
disabled (as defined in Code Section 22(e)(3)). If elected, this provision
shall apply to either just non-highly compensated Participants or to all
Participants for the period specified in Section 2.1 of this
Amendment.
|
3.3
|
Administrative delay ("the
first few weeks") rule.
415 Compensation for a "Limitation Year"
shall not include, unless otherwise elected in Section 2.1 of this
Amendment, amounts earned but not paid during the "Limitation Year" solely
because of the timing of pay periods and pay dates. However, if elected in
Section 2.1 of this Amendment, 415 Compensation for a "Limitation Year"
shall include amounts earned but not paid during the "Limitation Year"
solely because of the timing of pay periods and pay dates, provided the
amounts are paid during the first few weeks of the next "Limitation Year,"
the amounts are included on a uniform and consistent basis with respect to
all similarly situated Participants, and no compensation is included in
more than one "Limitation Year."
|
3.4
|
Inclusion of certain
nonqualified deferred compensation amounts.
If the Plan's
definition of Compensation for purposes of Code Section 415 is the
definition in Regulations Section 1.415(c)-2(b) (Regulations Section
1.415-2(d)(2) under the Regulations in effect for "Limitation Years"
beginning prior to July 1, 2007) and the simplified compensation
definition of Regulations Section 1.415(c)-2(d)(2) (Regulations Section
1.415-2(d)(10) under the Regulations in effect for "Limitation Years"
prior to July 1, 2007) is not used, then 415 Compensation shall include
amounts that are includible in the gross income of a Participant under the
rules of Code Section 409A or Code Section 457(f)(1)(A) or because the
amounts are constructively received by the
Participant.
|
3.5
|
Back Pay.
Payments
awarded by an administrative agency or court or pursuant to a bona fide
agreement by an Employer to compensate an Employee for lost wages are 415
Compensation for the "Limitation Year" to which the back pay relates, but
only to the extent such payments represent wages and compensation that
would otherwise be included in 415 Compensation under this
Article.
|
3.6
|
Change of "Limitation
Year
." The "Limitation Year" may only be changed by a Plan
amendment. Furthermore, if the Plan is terminated effective as of a date
other than the last day of the Plan's "Limitation Year," then the Plan is
treated as if the Plan had been amended to change its "Limitation
Year."
|
4.1
|
Compensation paid after
"Severance from Employment."
Compensation for purposes of benefits
(hereinafter referred to as Plan Compensation) shall be adjusted, unless
otherwise elected in Amendment Section 2.1, in the same manner as 415
Compensation pursuant to Article III of this Amendment if those amounts
would have been included in Compensation if they were paid prior tot he
Participant's "Severance from Employment," except in applying Article III,
the term "Limitation Year" shall be replaced with the term "Plan Year" and
the term "415
|
4.2
|
Effective date of Plan
Compensation provisions
. The provisions of this Article shall apply
for Plan Years beginning on and after July 1, 2007, unless another
effective date is specified in Section 2.1 of this
Amendment.
|
6.1
|
Annual
Benefit.
|
|
(a)
|
Effective date.
The
limitations of this Article apply in "Limitation Years" beginning on or
after July 1, 2007, except as otherwise provided
herein.
|
|
(b)
|
"Annual Benefit."
The
“Annual Benefit” otherwise payable to a Participant under the Plan at any
time shall not exceed the “Maximum Permissible Benefit.” If the benefit
the Participant would otherwise accrue in a "Limitation Year" would
produce an “Annual Benefit” in excess of the
“Maximum
|
|
Permissible
Benefit,” then the benefit shall be limited (or the rate of accrual
reduced) to a benefit that does not exceed the “Maximum Permissible
Benefit.”
|
|
(c)
|
Adjustment if in two defined
benefit plans.
If the Participant is, or has ever been, a
Participant in another qualified defined benefit plan (without regard to
whether the plan has been terminated) maintained by the Employer or a
"Predecessor Employer," the sum of the Participant’s “Annual Benefits”
from all such plans may not exceed the “Maximum Permissible Benefit.”
Where the Participant’s employer-provided benefits under all such defined
benefit plans (determined as of the same age) would exceed the “Maximum
Permissible Benefit” applicable at that age, the Employer shall limit a
Participant’s benefit in accordance with the terms of the
Plans.
|
|
(d)
|
Grandfather of limits prior to
July 1, 2007.
The application of the provisions of this Article
shall not cause the “Maximum Permissible Benefit” for any Participant to
be less than the Participant’s Accrued Benefit under all the defined
benefit plans of the Employer or a "Predecessor Employer" as of the end of
the last "Limitation Year" beginning before July 1, 2007 under provisions
of the plans that were both adopted and in effect before April 5, 2007.
The preceding sentence applies only if the provisions of such defined
benefit plans that were both adopted and in effect before April 5, 2007
satisfied the applicable requirements of statutory provisions,
Regulations, and other published guidance relating to Code Section 415 in
effect as of the end of the last "Limitation Year" beginning before July
1, 2007, as described in Regulations Section
1.415(a)-1(g)(4).
|
|
(e)
|
Other rules applicable.
The limitations of this Article shall be determined and applied
taking into account the rules in Amendment Section
6.3.
|
6.2
|
Definitions.
For
purposes of this Amendment, the following definitions
apply.
|
|
(a)
|
Annual Benefit.
"Annual
Benefit" means a benefit that is payable annually in the form of a
"Straight Life Annuity." Except as provided below, where a benefit is
payable in a form other than a "Straight Life Annuity," the benefit shall
be adjusted to an actuarially equivalent "Straight Life Annuity" that
begins at the same time as such other form of benefit and is payable on
the first day of each month, before applying the limitations of this
Article. For a Participant who has or will have distributions commencing
at more than one Annuity Starting Date, the "Annual Benefit" shall be
determined as of each such Annuity Starting Date (and shall satisfy the
limitations of this Article as of each such date), actuarially adjusting
for past and future distributions of benefits commencing at the other
Annuity Starting Dates. For this purpose, the determination of whether a
new Annuity Starting Date has occurred shall be made without regard to
Regulations Section 1.401(a)-20, Q&A 10(d), and with regard to
Regulations Section 1.415(b)1(b)(1)(iii)(B) and
(C).
|
|
(1)
|
Benefit forms not subject to
Code Section 417(e)(3)
. The "Straight Life Annuity" that is
actuarially equivalent to the Participant’s form of benefit shall be
determined under this subsection (1) if the form of the Participant’s
benefit is either (a) a nondecreasing annuity (other than a "Straight Life
Annuity") payable for a period of not less than the life of the
Participant (or, in the case of a qualified pre-retirement survivor
annuity, the life of the surviving spouse), or (b) an annuity that
decreases during the life of the Participant merely because of (1) the
death of the survivor annuitant (but only if the reduction is not below
50% of the benefit payable before the death of the survivor annuitant), or
(2) the cessation or reduction of Social Security supplements or qualified
disability payments (as defined in Code Section
401(a)(11)).
|
|
(i)
|
"
Limitation Years" beginning
before July 1, 2007.
For "Limitation Years" beginning before July
1, 2007, the actuarially equivalent "Straight Life Annuity" is equal to
the annual amount of the "Straight Life Annuity" commencing at the same
Annuity Starting Date that has the same actuarial present value as the
Participant’s form of benefit computed using whichever of the following
produces the greater annual amount: (I) the interest rate and mortality
table (or other tabular factor) specified in the Plan for adjusting
benefits in the same form; and (II) 5% interest rate assumption and the
applicable mortality table defined in the Plan for that Annuity Starting
Date.
|
|
(ii)
|
"
Limitation Years" beginning on
or after July 1, 2007.
For "Limitation Years" beginning on or after
July 1, 2007, the actuarially equivalent "Straight Life Annuity" is equal
to the greater of (I) the annual amount of the "Straight Life Annuity" (if
any) payable to the Participant under the Plan commencing at the same
Annuity Starting Date as the Participant’s form of benefit; and (II) the
annual amount of the "Straight Life Annuity" commencing at the same
Annuity Starting Date that has the same actuarial present value as the
Participant’s form of benefit, computed using a 5% interest rate
assumption and the applicable mortality table defined in the Plan for that
Annuity Starting Date.
|
|
(2)
|
Benefit Forms Subject to Code
Section 417(e)(3).
The "Straight Life Annuity" that is actuarially
equivalent to the Participant’s form of benefit shall be determined under
this paragraph if the form of the Participant’s benefit is other than a
benefit form described in Amendment Section 6.2(a)(1) above. In this case,
the actuarially equivalent "Straight Life Annuity" shall be determined as
follows:
|
|
(i)
|
Annuity Starting Date in Plan
Years Beginning After 2005
. If the Annuity Starting Date of the
Participant’s form of benefit is in a Plan Year beginning after 2005, the
actuarially equivalent "Straight Life Annuity" is equal to the greatest of
(I) the annual amount of the "Straight Life Annuity" commencing at the
same Annuity Starting Date that has the same actuarial present value as
the Participant’s form of benefit, computed using the interest rate and
mortality table (or other tabular factor) specified in the Plan for
adjusting benefits in the same form; (II) the annual amount of the
"Straight Life Annuity" commencing at the same Annuity Starting Date that
has the same actuarial present value as the Participant’s form of benefit,
computed using a 5.5 percent interest rate assumption and the applicable
mortality table defined in the Plan; and (III) the annual amount of the
"Straight Life Annuity" commencing at the same Annuity Starting Date that
has the same actuarial present value as the Participant’s form of benefit,
computed using the applicable interest rate and applicable mortality table
defined in the Plan, divided by
1.05.
|
|
(ii)
|
Annuity Starting Date in Plan
Years Beginning in 2004 or 2005
. If the Annuity Starting Date of
the Participant’s form of benefit is in a Plan Year beginning in 2004 or
2005, except as provided in the transition rule of (iii) below (if
elected), the actuarially equivalent "Straight Life Annuity" is equal to
the annual amount of the "Straight Life Annuity" commencing at the same
annuity starting date that has the same actuarial present value as the
Participant’s form of benefit, computed using whichever of the following
produces the greater annual amount: (I) the interest rate and mortality
table (or other tabular factor) specified in the Plan for adjusting
benefits in the same
|
|
(iii)
|
Transition rule.
If the
transitional rule is elected in Amendment Section 2.2, then if the Annuity
Starting Date of the Participant’s benefit is on or after the first day of
the first Plan Year beginning in 2004 and before December 31, 2004, the
application of this Amendment Section 6.2(a)(ii) shall not cause the
amount payable under the Participant’s form of benefit to be less than the
benefit calculated under the Plan, taking into account the limitations of
this Article, except that the actuarially equivalent "Straight Life
Annuity" is equal to the annual amount of the "Straight Life Annuity"
commencing at the same Annuity Starting Date that has the same actuarial
present value as the Participant’s form of benefit, computed using
whichever of the following produces the greatest annual amount: (I) the
interest rate and mortality table (or other tabular factor) specified in
the Plan for adjusting benefits in the same form; (II) the applicable
interest rate and applicable mortality table defined in the Plan; and
(III) the
applicable interest rate defined in the Plan (as in effect on the last day
of the last Plan Year beginning before January 1, 2004, under provisions
of the Plan then adopted and in effect) and the applicable mortality table
defined in the Plan.
|
|
(b)
|
Defined Benefit Compensation
Limitation.
"Defined Benefit Compensation Limitation" means 100% of
a Participant’s "High Three-Year Average Compensation," payable in the
form of a "Straight Life Annuity." Unless otherwise elected by the
Employer in Amendment Section 2.3, in the case of a Participant who has
had a "Severance from Employment" with the Employer, the "Defined Benefit
Compensation Limitation" applicable to the Participant in any "Limitation
Year" beginning after the date of severance shall be automatically
adjusted by multiplying the limitation applicable to the Participant in
the prior "Limitation Year" by the annual adjustment factor under Code
Section 415(d) that is published in the Internal Revenue Bulletin. The
adjusted compensation limit shall apply to "Limitation Years" ending with
or within the calendar year of the date of the adjustment, but a
Participant’s benefits shall not reflect the adjusted limit prior to
January 1 of that calendar year.
|
|
(c)
|
Defined Benefit Dollar
Limitation.
"Defined Benefit Dollar Limitation" means, effective
for "Limitation Years" ending after December 31,
2001,
|
|
$160,000,
automatically adjusted under Code Section 415(d), effective January 1 of
each year, as published in the Internal Revenue Bulletin, and payable in
the form of a "Straight Life Annuity." The new limitation shall apply to
"Limitation Years" ending with or within the calendar year of the date of
the adjustment, but a Participant’s benefits shall not reflect the
adjusted limit prior to January 1 of that calendar year. If elected by the
Employer in Amendment Section 2.4, the automatic annual adjustment of the
"Defined Benefit Dollar Limitation" under Code 415(d) shall apply to
Participants who have had a separation from
employment.
|
|
(d)
|
Employer.
"Employer"
means, for purposes of this Article, the Employer that has adopted the
Plan, and all members of a controlled group of corporations, as
defined in Code Section 414(b), as modified by Code Section 415(h)), all
commonly controlled trades or businesses (as defined in Code Section
414(c), as modified, except in the case of a brother-sister group of
trades or businesses under common control, by Code Section 415(h)), or
affiliated service groups (as defined in Code Section 414(m)) of which the
adopting Employer is a part, and any other entity required to be
aggregated with the employer pursuant to Code Section
414(o).
|
|
(e)
|
Formerly Affiliated Plan of the
Employer.
"Formerly Affiliated Plan of the Employer" means a plan
that, immediately prior to the cessation of affiliation, was actually
maintained by the Employer and, immediately after the cessation of
affiliation, is not actually maintained by the Employer. For this purpose,
"cessation of affiliation" means the event that (i) causes an entity to no
longer be considered the Employer, such as the sale of a member of a
controlled group of corporations, as defined in Code Section 414(b), as
modified by Code Section 415(h), to an unrelated corporation, or (ii)
causes a plan to not actually be maintained by the Employer, such as
transfer of plan sponsorship outside a controlled
group.
|
|
(f)
|
High Three-Year Average
Compensation.
"High Three-Year Average Compensation" means the
average 415 Compensation for the three consecutive Years of Service (or,
if the Participant has less than three consecutive Years of Service, the
Participant’s longest consecutive period of service, including fractions
of years, but not less than one year) with the Employer that produces the
highest average. A Participant’s 415 Compensation for a Year of Service
shall not include 415 Compensation in excess of the limitation under Code
Section 401(a)(17) that is in effect for the calendar year in which such
Year of Service begins. For purposes of this definition, a Year of Service
with the Employer is the 12-consecutive month period defined in the Plan
which is used to determine 415 Compensation under the
Plan.
|
|
(g)
|
Limitation Year.
"Limitation Year" means the period specified in the Plan that is
used to apply the Code Section 415
limitations.
|
|
(h)
|
Maximum Permissible Benefit.
"Maximum Permissible Benefit" means the lesser of the "Defined
Benefit Dollar Limitation" or the "Defined Benefit Compensation
Limitation" (both adjusted where required, as provided
below).
|
|
(1)
|
Adjustment
for Less Than 10 Years of Participation or Service: If the Participant has
less than 10 years of participation in the Plan, the "Defined Benefit
Dollar Limitation" shall be multiplied by a fraction -- (i) the numerator
of which is the number of "Years of Participation" in the Plan (or part
thereof, but not less than one year), and (ii) the denominator of which is
ten (10). In the case of a Participant who has less than ten Years of
Service with the Employer, the "Defined Benefit Compensation Limitation"
shall be multiplied by a fraction -- (i) the numerator of which is the
number of "Years of Service" with the Employer (or part thereof, but not
less than one year), and (ii) the denominator of which is ten
(10).
|
|
(2)
|
Adjustment
of "Defined Benefit Dollar Limitation" for Benefit Commencement Before Age
62 or after Age 65: Effective for benefits commencing in "Limitation
Years" ending after December 31, 2001, the "Defined Benefit Dollar
Limitation" shall be adjusted if the Annuity Starting Date of the
Participant’s benefit is before age 62 or after age 65. If the Annuity
Starting Date is before age 62, the "Defined Benefit Dollar Limitation"
shall be adjusted under section 6.2(h)(2)(i), as modified by Amendment
Section 6.2(h)(2)(iii). If the Annuity Starting Date is after age 65, the
"Defined Benefit Dollar Limitation" shall be adjusted under Amendment
Section 6.2(h)(2)(ii), as modified by Amendment Section
6.2(h)(2)(iii).
|
|
(i)
|
Adjustment
of "Defined Benefit Dollar Limitation" for Benefit Commencement Before Age
62:
|
|
(I)
|
"Limitation
Years" Beginning Before July 1, 2007. If the Annuity Starting Date for the
Participant’s benefit is prior to age 62 and occurs in a "Limitation Year"
beginning before July 1, 2007, the "Defined Benefit Dollar Limitation" for
the Participant’s Annuity Starting Date is the annual amount of a benefit
payable in the form of a "Straight Life Annuity" commencing at the
Participant’s Annuity Starting Date that is the actuarial equivalent of
the "Defined Benefit Dollar Limitation" (adjusted under Amendment Section
6.2(h)(1) for years of participation less than ten (10), if required) with
actuarial equivalence computed using whichever
of
|
|
(II)
|
"Limitation
Years" Beginning on or After July 1,
2007.
|
|
(A)
|
Plan
Does Not Have Immediately Commencing "Straight Life Annuity" Payable at
both Age 62 and the Age of Benefit Commencement. If the Annuity Starting
Date for the Participant’s benefit is prior to age 62 and occurs in a
"Limitation Year" beginning on or after July 1, 2007, and the Plan does
not have an immediately commencing "Straight Life Annuity" payable at both
age 62 and the age of benefit commencement, the "Defined Benefit Dollar
Limitation" for the Participant’s Annuity Starting Date is the annual
amount of a benefit payable in the form of a "Straight Life Annuity"
commencing at the Participant’s Annuity Starting Date that is the
actuarial equivalent of the "Defined Benefit Dollar Limitation" (adjusted
under Amendment Section 6.2(h)(1) for years of participation less than ten
(10), if required) with actuarial equivalence computed using a
five-percent (5%) interest rate assumption and the applicable mortality
table for the Annuity Starting Date as defined in the Plan(and expressing
the Participant’s age based on completed calendar months as of the Annuity
Starting Date).
|
|
(B)
|
Plan
Has Immediately Commencing "Straight Life Annuity" Payable at both Age 62
and the Age of Benefit Commencement. If the Annuity Starting Date for the
Participant’s benefit is prior to age 62 and occurs in a "Limitation Year"
beginning on or after July 1, 2007, and the Plan has an immediately
commencing "Straight Life Annuity" payable at both age 62 and the age of
benefit commencement, the "Defined Benefit Dollar Limitation" for the
Participant’s Annuity Starting Date is the lesser of the limitation
determined under Amendment Section 6.2(h)(2)(i)(II)(A) and the "Defined
Benefit Dollar Limitation" (adjusted under Amendment Section 6.2(h)(1) for
years of participation less than ten (10), if required) multiplied by the
ratio of the annual amount of the immediately commencing "Straight Life
Annuity" under the Plan at the Participant’s Annuity Starting Date to the
annual amount of the immediately commencing "Straight Life Annuity" under
the Plan at age 62, both determined without applying the limitations of
this article.
|
|
(ii)
|
Adjustment
of "Defined Benefit Dollar Limitation" for
Benefit
|
|
Commencement
After Age 65:
|
|
(I)
|
"Limitation
Years" Beginning Before July 1, 2007. If the Annuity Starting Date for the
Participant’s benefit is after age 65 and occurs in a Limitation Year
beginning before July 1, 2007, the "Defined Benefit Dollar Limitation" for
the Participant’s Annuity Starting Date is the annual amount of a benefit
payable in the form of a "Straight Life Annuity" commencing at the
Participant’s Annuity Starting Date that is the actuarial equivalent of
the "Defined Benefit Dollar Limitation" (adjusted under Amendment Section
6.2(h)(1) for years of participation less than ten (10), if required) with
actuarial equivalence computed using whichever of the following produces
the smaller annual amount: (1) the interest rate and mortality table (or
other tabular factor) specified in the Plan; or (2) a five-percent (5%)
interest rate assumption and the applicable mortality table as defined in
the Plan.
|
|
(II)
|
"Limitation
Years" Beginning Before July 1,
2007.
|
|
(A)
|
Plan
Does Not Have Immediately Commencing "Straight Life Annuity" Payable at
both Age 65 and the Age of Benefit Commencement. If the annuity starting
date for the Participant’s benefit is after age 65 and occurs in a
"Limitation Year" beginning on or after July 1, 2007, and the Plan does
not have an immediately commencing "Straight Life Annuity" payable at both
age 65 and the age of benefit commencement, the "Defined Benefit Dollar
Limitation" at the Participant’s Annuity Starting Date is the annual
amount of a benefit payable in the form of a "Straight Life Annuity"
commencing at the Participant’s Annuity Starting Date that is the
actuarial equivalent of the "Defined Benefit Dollar Limitation" (adjusted
under Amendment Section 6.2(h)(1)for years of participation less than 10,
if required), with actuarial equivalence computed using a 5% interest rate
assumption and the applicable mortality table for that Annuity Starting
Date as defined in the Plan (and expressing the Participant’s age based on
completed calendar months as of the Annuity Starting
Date).
|
|
(B)
|
Plan
Has Immediately Commencing "Straight Life Annuity" Payable at both Age 65
and the Age of Benefit Commencement. If the Annuity Starting Date for the
Participant’s benefit is after age 65 and occurs in a "Limitation Year"
beginning on or after July 1, 2007, and the plan has an immediately
commencing "Straight Life Annuity" payable at both age 65 and the age of
benefit commencement, the "Defined Benefit Dollar Limitation" at the
Participant’s Annuity Starting Date is the lesser of
the
|
|
limitation
determined under Amendment Section 6.2(h)(2)(ii)(II)(A) and the "Defined
Benefit Dollar Limitation" (adjusted under Amendment Section 6.2(h)(1) for
years of participation less than ten (10), if required) multiplied by the
ratio of the annual amount of the adjusted immediately commencing
"Straight Life Annuity" under the Plan at the Participant’s Annuity
Starting Date to the annual amount of the adjusted immediately commencing
"Straight Life Annuity" under the Plan at age 65, both determined without
applying the limitations of this Article. For this purpose, the adjusted
immediately commencing "Straight Life Annuity" under the Plan at the
Participant’s Annuity Starting Date is the annual amount of such annuity
payable to the Participant, computed disregarding the Participant’s
accruals after age 65 but including actuarial adjustments even if those
actuarial adjustments are used to offset accruals; and the adjusted
immediately commencing "Straight Life Annuity" under the Plan at age 65 is
the annual amount of such annuity that would be payable under the Plan to
a hypothetical Participant who is age 65 and has the same accrued benefit
as the Participant.
|
|
(iii)
|
Notwithstanding
the other requirements of this Amendment Section 6.2(h)(2), no adjustment
shall be made to the "Defined Benefit Dollar Limitation" to reflect the
probability of a Participant’s death between the Annuity Starting Date and
age 62, or between age 65 and the Annuity Starting Date, as applicable, if
benefits are not forfeited upon the death of the Participant prior to the
Annuity Starting Date. To the extent benefits are forfeited upon death
before the Annuity Starting Date, such an adjustment shall be made. For
this purpose, no forfeiture shall be treated as occurring upon the
Participant’s death if the Plan does not charge Participants for providing
a qualified preretirement survivor annuity, as defined in Code Section
417(c), upon the Participant’s
death.
|
|
(3)
|
Minimum
benefit permitted: Notwithstanding anything else in this Section to the
contrary, the benefit otherwise accrued or payable to a Participant under
this Plan shall be deemed not to exceed the "Maximum Permissible Benefit"
if:
|
|
(i)
|
the
retirement benefits payable for a "Limitation Year" under any form of
benefit with respect to such Participant under this Plan and under all
other defined benefit plans (without regard to whether a plan has been
terminated) ever maintained by the Employer do not exceed $10,000
multiplied by a fraction – (I) the numerator of which is the Participant’s
number of Years (or part thereof, but not less than one year) of Service
(not to exceed ten (10)) with the Employer, and
(II)
|
|
the
denominator of which is ten (10);
and
|
|
(ii)
|
the
Employer (or a "Predecessor Employer") has not at any time maintained a
defined contribution plan in which the Participant participated (for this
purpose, mandatory Employee contributions under a defined benefit plan,
individual medical accounts under Code Section 401(h), and accounts for
post-retirement medical benefits established under Code Section 419A(d)(1)
are not considered a separate defined contribution
plan).
|
|
(i)
|
Predecessor Employer
.
"Predecessor Employer" means, with respect to a Participant, a former
employer of such Participant if the Employer maintains a Plan that
provides a benefit which the Participant accrued while performing services
for the former employer. A former entity that antedates the Employer is
also a "Predecessor Employer" with respect to a Participant if, under the
facts and circumstances, the Employer constitutes a continuation of all or
a portion of the trade or business of the former entity. For this purpose,
the formerly affiliated plan rules in Regulations Section 1.415(f)-1(b)(2)
apply as if the Employer and "Predecessor Employer" constituted a single
employer under the rules described in Regulations Section 1.415(a)-1(f)(1)
and (2) immediately prior to the cessation of affiliation (and as if they
constituted two, unrelated employers under the rules described in
Regulations Section 1.415(a)-1(f)(1) and (2) immediately after the
cessation of affiliation) and cessation of affiliation was the event that
gives rise to the "Predecessor Employer" relationship, such as a transfer
of benefits or plan sponsorship.
|
|
(j)
|
Severance from Employment.
"Severance from Employment" means, with respect to any individual,
cessation from being an Employee of the Employer maintaining the Plan. An
Employee does not have a "Severance from Employment" if, in connection
with a change of employment, the Employee’s new employer maintains the
Plan with respect to the Employee.
|
|
(k)
|
Straight Life Annuity.
"Straight Life Annuity" means an annuity payable in equal
installments for the life of a Participant that terminates upon the
Participant's death.
|
|
(l)
|
Year of Participation.
"Year of Participation" means, with respect to a Participant, each
accrual computation period (computed to fractional parts of a year) for
which the following conditions are met: (1) the Participant is credited
with at least the number of Hours of Service (or Period of Service if the
Elapsed Time Method is used) for benefit accrual purposes, required under
the terms of the Plan in order to accrue a benefit for the accrual
computation period, and (2) the Participant is included as a Participant
under the eligibility provisions of the Plan for at least one day of the
accrual computation period. If these two conditions are met, the portion
of a "Year of Participation" credited to the Participant shall equal the
amount of benefit accrual service credited to the Participant for such
accrual computation period. A Participant who
is
|
|
(m)
|
Year of Service.
"Year
of Service" means, for purposes of Amendment Section 6.2(f), each accrual
computation period (computed to fractional parts of a year) for which a
Participant is credited with at least the number of Hours of Service (or
Period of Service if the Elapsed Time Method is used) for benefit accrual
purposes, required under the terms of the Plan in order to accrue a
benefit for the accrual computation period, taking into account only
service with the Employer or a "Predecessor
Employer."
|
6.3
|
Other
rules.
|
|
(a)
|
Benefits under terminated
plans.
If a defined benefit plan maintained by the Employer has
terminated with sufficient assets for the payment of benefit liabilities
of all plan participants and a Participant in the plan has not yet
commenced benefits under the plan, the benefits provided pursuant to the
annuities purchased to provide the Participant’s benefits under the
terminated plan at each possible Annuity Starting Date shall be taken into
account in applying the limitations of this Article. If there are not
sufficient assets for the payment of all Participants’ benefit
liabilities, the benefits taken into account shall be the benefits that
are actually provided to the Participant under the terminated
plan.
|
|
(b)
|
Benefits transferred from the
Plan.
If a Participant’s benefits under a defined benefit plan
maintained by the employer are transferred to another defined benefit plan
maintained by the Employer and the transfer is not a transfer of
distributable benefits pursuant Regulations Section 1.411(d)-4,
Q&A-3(c), then the transferred benefits are not treated as being
provided under the transferor plan (but are taken into account as benefits
provided under the transferee plan). If a Participant’s benefits under a
defined benefit plan maintained by the Employer are transferred to another
defined benefit plan that is not maintained by the Employer and the
transfer is not a transfer of distributable benefits pursuant to
Regulations Section 1.411(d)-4, Q&A-3(c), then the transferred
benefits are treated by the Employer’s Plan as if such benefits were
provided under annuities purchased to provide benefits under a plan
maintained by the Employer that terminated immediately prior to the
transfer with sufficient assets to pay all Participants’ benefit
liabilities under the plan. If a Participant’s benefits under a defined
benefit plan maintained by the Employer are transferred to another defined
benefit plan in a transfer of distributable benefits pursuant to
Regulations Section 1.411(d)-4, Q&A-3(c), the amount transferred is
treated as a benefit paid from the transferor
plan.
|
|
(c)
|
Formerly affiliated plans of
the Employer.
A "Formerly Affiliated Plan of an Employer" shall be
treated as a plan maintained by the Employer, but the formerly affiliated
plan shall be treated as if it had terminated immediately prior to the
cessation of affiliation with sufficient assets to pay Participants’
benefit liabilities under the Plan and had purchased annuities to provide
benefits.
|
|
(d)
|
Plans of a "Predecessor
Employer."
If the Employer maintains a defined benefit plan that
provides benefits accrued by a Participant while performing services for a
"Predecessor Employer," then the Participant’s benefits under a plan
maintained by the "Predecessor Employer" shall be treated as provided
under a plan maintained by the Employer. However, for this purpose, the
plan of the "Predecessor Employer" shall be treated as if it had
terminated immediately prior to the event giving rise to the "Predecessor
Employer" relationship with sufficient assets to pay Participants’ benefit
liabilities under the plan, and had purchased annuities to provide
benefits; the Employer and the "Predecessor Employer" shall be treated as
if they were a single employer immediately prior to such event and as
unrelated employers immediately after the event; and if the event giving
rise to the predecessor relationship is a benefit transfer, the
transferred benefits shall be excluded in determining the benefits provide
under the plan of the "Predecessor
Employer."
|
|
(e)
|
Special rules.
The
limitations of this Article shall be determined and applied taking into
account the rules in Regulations Section 1.415(f)-1(d), (e) and
(h).
|
|
(f)
|
Aggregation with Multiemployer
Plans.
|
|
(1)
|
If
the Employer maintains a multiemployer plan, as defined in Code Section
414(f), and the multiemployer plan so provides, only the benefits under
the multiemployer plan that are provided by the Employer shall be treated
as benefits provided under a plan maintained by the Employer for purposes
of this Article.
|
|
(2)
|
Effective
for "Limitation Years" ending after December 31, 2001, a multiemployer
plan shall be disregarded for purposes of applying the compensation
limitation of Amendment Sections 6.2(b) and 6.2(h)(1) to a plan which is
not a multiemployer plan.
|
First
Bancorp
|
||
By:
/s/ Timothy S. Maples
|
||
Authorized
Representative
|
|
“(d)
|
Employees
hired by the employer on or after June 11,
2009;
|
|
(e)
|
Employees
of the employer who became employed as a result of the acquisition of
Cooperative Bank on June 19, 2009.”
|
FIRST
BANCORP
|
||
By:
/s/ Jerry L. Ocheltree
|
||
Its:
President &
CEO
|
Years
Ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
Including Interest on
Deposits:
|
||||||||||||||||||||
Earnings:
|
||||||||||||||||||||
Income
before income taxes
|
$ | 97,877 | 35,125 | 34,960 | 30,725 | 32,919 | ||||||||||||||
Fixed
charges
|
49,075 | 61,483 | 69,837 | 54,856 | 33,006 | |||||||||||||||
Total
earnings
|
$ | 146,952 | 96,608 | 104,797 | 85,581 | 65,925 | ||||||||||||||
Fixed
charges:
|
||||||||||||||||||||
Interest
on deposits
|
$ | 45,518 | 53,241 | 59,553 | 46,032 | 28,516 | ||||||||||||||
Interest
on borrowings
|
3,377 | 7,947 | 9,886 | 8,400 | 4,085 | |||||||||||||||
Amortization
of debt issuance costs
|
— | 115 | 219 | 239 | 237 | |||||||||||||||
Interest
portion of rental expense (1)
|
180 | 180 | 179 | 185 | 168 | |||||||||||||||
Total
fixed charges
|
$ | 49,075 | 61,483 | 69,837 | 54,856 | 33,006 | ||||||||||||||
Preferred
dividend requirements
|
3,169 | — | — | — | — | |||||||||||||||
Total
fixed charges and preferred dividends
|
$ | 52,244 | 61,483 | 69,837 | 54,856 | 33,006 | ||||||||||||||
Ratio
of earnings to fixed charges, including interest on
deposits
|
2.99 | x | 1.62 | x | 1.50 | x | 1.56 | x | 2.00 | x | ||||||||||
Ratio
of earnings to fixed charges and preferred dividends, including interest
on deposits
|
2.81 | x | 1.62 | x | 1.50 | x | 1.56 | x | 2.00 | x | ||||||||||
Excluding Interest on
Deposits:
|
||||||||||||||||||||
Earnings:
|
||||||||||||||||||||
Income
before income taxes
|
$ | 97,877 | 35,125 | 34,960 | 30,725 | 32,919 | ||||||||||||||
Fixed
charges
|
3,557 | 8,242 | 10,284 | 8,824 | 4,490 | |||||||||||||||
Total
earnings
|
$ | 101,434 | 43,367 | 45,244 | 39,549 | 37,409 | ||||||||||||||
Fixed
charges:
|
||||||||||||||||||||
Interest
on borrowings
|
$ | 3,377 | 7,947 | 9,886 | 8,400 | 4,085 | ||||||||||||||
Amortization
of debt issuance costs
|
— | 115 | 219 | 239 | 237 | |||||||||||||||
Interest
portion of rental expense (1)
|
180 | 180 | 179 | 185 | 168 | |||||||||||||||
Total
fixed charges
|
$ | 3,557 | 8,242 | 10,284 | 8,824 | 4,490 | ||||||||||||||
Preferred
dividend requirements
|
3,169 | — | — | — | — | |||||||||||||||
Total
fixed charges and preferred dividends
|
$ | 6,726 | 8,242 | 10,284 | 8,824 | 4,490 | ||||||||||||||
Ratio
of earnings to fixed charges, excluding interest on
deposits
|
28.52 | x | 5.26 | x | 4.40 | x | 4.48 | x | 8.33 | x | ||||||||||
Ratio
of earnings to fixed charges and preferred dividends, excluding interest
on deposits
|
15.08 | x | 5.26 | x | 4.40 | x | 4.48 | x | 8.33 | x |
(1)
|
Estimated
to be one-third of rental
expense.
|
Name of Subsidiary
and Name under
Which Subsidiary
Transacts Business
|
State of Incorporation
|
Address of Subsidiary
|
I.R.S. Employer Identification Number
|
|||
First Bank (1)
|
North Carolina
|
341 North Main Street
Troy, North Carolina 27371-0508
|
56-0132230
|
|||
Montgomery Data Services, Inc.
|
North Carolina
|
355 Bilhen Street
Troy, North Carolina 27371-0627
|
56-1421914
|
|||
First Bancorp Capital
Trust II
|
Delaware
|
341 North Main Street
Troy, North Carolina 27371-0508
|
83-6059905
|
|||
First Bancorp Capital
Trust III
|
Delaware
|
341 North Main Street
Troy, North Carolina 27371-0508
|
83-6059906
|
|||
First Bancorp Capital
Trust IV
|
Delaware
|
341 North Main Street
Troy, North Carolina 27371-0508
|
65-6465193
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 16, 2010
|
/s/ Jerry L. Ocheltree
|
Jerry L. Ocheltree
|
|
Chief Executive Officer
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
March 16, 2010
|
/s/ Eric P. Credle
|
Eric P. Credle
|
|
Chief Financial Officer
|
March
16, 2010
|
/s/ Jerry L. Ocheltree
|
|
Jerry
L. Ocheltree
|
March
16, 2010
|
/s/ Eric P. Credle
|
|
Eric
P. Credle
|